US Markets Soar on Treasury’s Debt Plan

Dow Jones almost surged 500 points on Treasury's plans to rescue plans of banks & housing sector.

Yahoo Reports

The government's announcement was what the market had waited weeks to hear. Treasury Secretary Timothy Geithner had announced an outline of the program last month but provided few details then about how it would work, leading to a poor reception in the markets.

Meanwhile, the housing report released Monday was overwhelmingly positive for the markets even though it showed a decline in home prices in February. Investors are embracing any sign that a glut in homes for sale may be easing.

The market had received another dose of housing good news last week on the troubled industry as housing starts for February came in much better than expected.

Bloomberg says:

Templeton Asset Management Ltd.’s Mark Mobius said the next “bull-market” rally in developing nations and there are bargains in every emerging market following a record slump in stocks & stocks surged from Shanghai to Sao Paulo on the U.S. Treasury’s plan to revive the banking system.

The MSCI Emerging Markets Index climbed the most this year, erasing losses for 2009, on U.S. plans to buy as much as $1 trillion of toxic assets. China’s Shanghai Composite Index rose for a sixth day, the longest winning stretch in more than 17 months, as the government encouraged mergers in the auto and steel industries. Russia’s Micex jumped to the highest since October after Citigroup Inc. said the stocks are “dirt cheap,” while banks led Brazil’s Bovespa index to a 5.1 percent gain.

“You have to be careful not to miss the opportunity,” Mobius, who helps oversee about $20 billion of emerging-market assets as executive chairman at San Mateo, California-based Templeton, said in an interview with Bloomberg Television today. “With all the negative news, there is a tendency to hold back.”

The 72-year old investor, voted among the “Top Ten Money Managers of the 20th Century” by the Carson Group, said there are bargains in every emerging market after the MSCI benchmark fell 57 percent from its October 2007 peak. Equity valuations tumbled as a collapse in U.S. consumer spending shrank demand for manufactured goods and commodities, while frozen bond markets curbed developing-nation companies’ access to credit.