Massive Late Day Rally Sends Markets Higher On Thursday

September 18, 2008 5:32 p.m. EST

New York, NY (AHN) - U.S. markets traded sideways on Thursday until a report from Treasury Secretary Henry Paulson in regard to relief of mortgage debt sent stocks surging.

Secretary Paulson, according to CNBC, said he is considering the creation of an entity that would acquire the mortgage debt that has burdened financial institutions. A similar move was made when the government created the Resolution Trust Corp. during the savings and loan crisis in the 1980's.

The Dow Jones Industrial gained 410 points or 3.86 percent. All 30 Dow components finished higher. AIG rebounded 31 percent, making it the largest percentage gainer in the Dow. Friday will be the last day AIG is a Dow component. On Monday Kraft will be added to the Dow in place of AIG.

The S&P 500 added 50 points or 4.3 percent. All 10 major economic sectors finished higher. Financials finished 9 percent higher after trading down as much as 6 percent earlier in the session.

Tech rallied as well, the Nasdaq Composite rose 100 points or 4.7 percent. Big-cap tech helped push the index higher as the Nasdaq 100 added 4 percent. Semiconductor stocks were the strongest group in tech, adding 5 percent on Thursday.

Crude oil gained on Thursday, adding $1.48 a barrel to settle at $98.64 on the New York Mercantile exchange.

In corporate news, FedEx posted earnings of $1.23 a share, in-line with estimates. The company raised earnings guidance going forward.

As for economic news, initial unemployment for the week ending Sept 13, rose to 455,000, showing continued deterioration in the labor market. The result was higher than the 440,000 economists were expecting.