Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
What Happened: On this day in 2008, the Dow Jones Industrial Average gained 11% after U.S. and European central banks announced a coordinated effort to provide liquidity to the global financial system.
Where The Market Was: The Dow closed at 9,387.61 and the S&P 500 traded at 1,003.35.
What Else Was Going On In The World: In 2008, the subprime mortgage crisis resulted in Citigroup Inc (NYSE:C) reporting a $9.83 billion net loss in the fourth quarter. U.S. President George W. Bush signed a $150 billion stimulus package to fight the financial crisis. The average American income was $40,523.
Historic Relief Rally: On Oct. 13, 2008, the U.S. Federal Reserve announced it would be working in conjunction with European central banks to provide liquidity to global financial markets.
The announcement comes at 2 a.m. Monday morning following the worst week in the history of the Dow Jones Industrial Average. In the previous week, the Dow dropped a record 18%, its worst week in the index’s 112-year history.
The proactive approach from European and U.S. central banks at least temporarily reassured investors about the stability of the financial system and triggered an epic relief rally. The Dow jumped 11% that Monday, while the S&P 500 soared 11.5%. The rally represents the largest single-day gain for the S&P 500 since the Great Depression.
Morgan Stanley (NYSE:MS) was one of the biggest market winners. The stock skyrocketed 87% higher that day after announcing it had secured $9 billion in financing from Japanese bank Mitsubishi UFJ Financial Group Inc (NYSE:MUFG).