U.S. stocks soar on central banks’ move to ease credit crunch

The Washington Post

U.S. stocks rallied Wednesday morning after the world’s major central banks unveiled a new strategy to create a wall of money that could prevent Europe’s financial woes from undermining the stability of the global banking system.

The Federal Reserve, European Central Bank and central banks in Canada, Britain, Switzerland and Japan said in a joint announcement that they will extend the timing of and lower the interest rate paid on “swaps,” arrangements that have been used intermittently since late 2007 to funnel dollars to the banking systems of countries where there is need.

The Dow Jones industrial average rose 395 points, or 3.5 percent, while the broader S&P 500 index rose 41 points, or 3.4 percent. The tech-heavy Nasdaq composite index was up 80 points, or 3.17.  More >>