Stock prices on Wall Street rose significantly on Tuesday as the U.S. government’s decision to increase aid to the auto industry sparked investor hope that authorities would continue to do everything possible to mitigate the recession.
The Dow Jones index jumped 2.17 percent to 8,668 points, while the S&P 500 index gained 2.44 percent, reaching 890 points. The Nasdaq index rose by 2.67 percent to 1,550 points.
Investors were encouraged by the U.S. government, which increased the loan to General Motors by one billion dollars and announced the purchase of shares worth five billion dollars in GMAC, GM’s financing division. This is part of the previously approved aid to the auto industry, totaling 17.5 billion dollars, which should save the largest American car manufacturer from bankruptcy. As a result, GM’s stock price jumped more than 5.5 percent, while Ford’s stock rose more than 3 percent.
Stock prices in the technology sector also rose significantly, especially for companies with substantial cash reserves, making it easier for them to weather the economic and consumption downturn. Oracle’s stock price increased by 3.5 percent, while IBM and Qualcomm stocks rose by more than 2.5 percent. After a sharp decline the day before, Dow Chemical’s stock also recovered yesterday. American media report that Dow Chemical could receive a bridge loan of 13 billion dollars for the acquisition of competitor Rohm & Haas, which was called into question after Kuwait withdrew from a joint investment with Dow Chemical on Monday. As a result, Dow’s stock price rose by 1.5 percent, and Rohm & Haas’s stock increased by nearly 12 percent.
