New Rescue Hopes Lift Stocks

Stocks rose at the open today, as traders bet on a new rescue plan and picked over the wreckage of yesterday’s record-setting drop. The Dow rose almost 218 points, while the Nasdaq and S&P were up 2.5% and 2.6% respectively. “After the absolute carnage we had yesterday there's inevitably going to be some bargain hunting,” said one trader. “Markets are pinning their hopes that a deal can be reached by the end of the week.”

If that doesn’t happen, the economic damage will be “painful and lasting,” President Bush said in a brief statement this morning. Many are also hoping to see an emergency intra-meeting rate cut from the Fed. Financial stocks rose on that speculation, with Citigroup up 8% after dropping 12% yesterday, and Wachovia rising 30% after yesterday's 82% skydive. (More economy stories.)