• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

Stocks in positive territory

September 16, 2008 12:00:00 AM PDT
Stocks rallied into positive territory on Tuesday. Between the giant drop in the Dow Jones, the collapse of two major financial institutions and the possible collapse of a third, investors are on edge.On Monday the market plummeted more than 500 points. However, Tuesday was a completely different story as investors boosted the Dow more than 141 points. The NASDAQ also moved up nearly 28 points. The difference was investors and the feds stopped panicking.

The Federal Reserve didn't flinch after Monday's big sell-off. They held interest rates steady Tuesday, soothing fears that the financial markets are in deep trouble.

Insurance giant AIG, with its 100,000 employees and 17 million customers, is still on the brink of bankruptcy. Such a collapse would be a disaster for the company and the insurance industry as a whole.

"They insure everything from cars, to corporations, to - you name it. It would be magnitudes bigger in impact than the Lehman bankruptcy was," said Liz Moyer, staff writer, Forbes.com.

Goldman Sachs, the largest of two independent investment banks on Wall Street, is still in business. Although its earnings were down in Tuesday's announcement, they were better than expected.

In the meantime, financial planners like Luis Barajas are reminding investors we have been through tough times before.

"I think people have short-term memories. They forget about the past, they forget about the old embargoes, they forget about 9/11, they forget about World War II, they forget about all these crisis we've had," said Barajas.

During each of those past events, we survived and the markets got stronger, which is why Luis says we shouldn't stop investing.

"What's going to happen in is five years from now, we're going to look at this as one of the best opportunities to really invest it in the stock market," said Barajas.

One very good sign was the price of crude oil fell by more than $4.50 to $91.15 a barrel. The price hasn't been that low since 2007.

There are also reports that AIG is getting a bridge loan of $85 billion from the government for an 80-percent stake in the company. The Dow futures are up on the report.

 

- Get more L.A. breaking news, weather, traffic and sports
- Have a news tip? Send your tips, video, or pictures


Load Comments