WASHINGTON -- Stocks struggled Tuesday, as investors welcomed the government's plan to spend $250 billion to buy stock in banks, but opted to step back after the previous session's massive advance.
Investors seem to like the government's plans to buy stock in private banks. But there's also some profit-taking going on -- particularly after the Dow surged some 400 points at the opening. Analysts expect jittery trading to continue for weeks or perhaps months.
At the close of business Tuesday, the Dow was down 76.62 points.
President George W. Bush announced Tuesday morning a $250 billion plan by the government to directly buy shares in the nation's leading banks. He said the steps were "not intended to take over the free market but to preserve it."
Bush, in the latest of a series of statements on the troubled economy, said that and other steps will help restore confidence and "return our economy to the path of growth and prosperity."
The president made his statement Tuesday in the Rose Garden of the White House after an early morning meeting with his economic advisers.
The plan is to use as much as $250 billion of the $700 billion bailout program approved by Congress to buy stock in U.S. banks. That should be spent by the end of the year, starting with the purchase of stock in nine large banks, including Citigroup, Wells Fargo, J.P. Morgan Chase and Bank of America.
Asian Markets Continue To Soar, Iceland Plummets
Asian stock markets soared overnight for a second consecutive day.
Japan's Nikkei gained more than 13 percent. Hong Kong's key index gained 4 percent, while South Korea's market jumped nearly 5 percent.
Iceland's stock exchange has plummeted almost 50 percent with Tuesday's restart of trading. It had halted equities trading for three days in a bid to prevent large falls on the exchange after a turbulent week where the government has taken control of the country's three major banks.
Second Stimulus Plan?
Politics may get in the way of a second economic stimulus plan.
Democrats are talking of returning after the election to work on a $150 billion plan.
A top Republican urged that Congress return before that, but quickly backed down.
Democrats want the package to include an extension on jobless benefits, and sending food aid to the poor and money to states to pay their Medicaid bills.
Republicans are calling for corporate and investment tax cuts, more energy exploration, and federally insuring 100 percent of bank transaction accounts.
Check, Please
The cost of going out to eat may go up in 2009.
Restaurants are expecting big increases in food costs, which will likely lead to menu changes and price hikes.
The National Restaurant Association said beef and veal costs have gone up about 19 percent, with processed chicken up about 3.5 percent.
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