Gamblers Go Heavy On Dow Closing Much Higher Following Citi Group News
Gamblers at online prediction market intrade.com were betting heavily that the Dow would close more than 25 points higher than Friday's close following news that the federal government agreed to a massive rescue package for financial giant Citigroup.
Close to 1000 bets were placed by 9 am EST that the Dow would close up to 100 points higher than Friday compared to around 300 bets that it would close lower.
At 8:13 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq composite futures were all significantly higher.
"Obviously the news out of Citi is welcoming," said Peter Cardillo, analyst for Avalon Partners. "We might be in for another day of gains today, and if that's the case, then we'll have two days of gains."
On Sunday, the U.S. federal government announced it would guarantee losses on more than $300 billion of Citi's troubled assets. The government also said it will make a fresh $20 billion investment in the bank.
The markets also reacted positively late Friday to news of President-Elect Barack Obama's likely choice for Treasury Secretary.
"The appointment of Timothy Geithner to be Secretary of the Treasury also could be an excellent choice," writes Joseph A. Palermo of the Huffington Post. "The gravity of the economic collapse requires a technocrat to fill that position, a technocrat who understands Wall Street. Geithner is a far better choice than Lawrence Summers (who is still part of Obama's economic team) and being 47 years old he has far less baggage than the baby-boomer financial wizards who caused the catastrophe. He also seems to be less wedded to market fundamentalism than most captains of high finance and far more sympathetic to what President-Elect Barack Obama wishes to accomplish."
Jagajeet Chiba, Gambling911.com
