CBNNews.com - WASHINGTON - International markets rebounded today even though the Dow Jones lost 445 points Thursday. Asian and European investors bought up financial and technology shares, hoping to build some momentum in a chaotic financial environment.
And U.S. investors are looking for a turnaround after the last few weeks' brutal selloff in the stock market.
Can Any Rally Last?
Despite American-led efforts - including huge bailouts - to get markets back on track, the recent headlines have been so bad that there doesn't seem to be any long-term relief in sight.
"There is no playbook for responding to a once or twice in a 100-year event," Treasury Secretary Henry Paulson said.
On Wall Street, stocks hit a five-year low Thursday, as traders fled to the safety of government bonds.
The Dow, which fell 445 points yesterday, has plunged 19 percent already this month, 43 percent for the year.
Worries that the auto industry could collapse without a federal bailout and that large financial firms haven't even begun to account for their recent losses have only added to the uncertainty about the economy.
"Nobody is spending money, nobody's got money. The banks aren't lending money. There's nothing really looking forward that says to you, 'you know what, it's time to get in,'" W.J. Blub & Sons trader Pat Casey said. For companies like J.P. Morgan and Citigroup, that means sliding stocks and employee layoffs.
In the auto sector, Detroit's Big Three are holding their breath after congress delayed a $25 billion rescue plan until the companies produced a realistic plan for rebuilding their industry.
Jobless Benefits Extended
Amid all the gloom, there is some positive news for struggling Americans. President Bush is set to sign a bill that would extend unemployment benefits, and Fannie Mae and Freddie Mac are suspending home foreclosures until early 2009.
Gas prices are way down, as is the overall cost of living.
But there is a downside: While falling prices are great for consumers, they can be a nightmare for retailers - because if prices keep falling, that can cut into profit margins for businesses. And that can lead to layoffs, further weakening the economy - creating a vicious cycle.
It's just one more concern for investors and markets as they look to the future.