- Michael Alter
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Nothing Succeeds Like Success
Tuesday, March 10’s 379.44 stock market spike – the best finish since Thanksgiving – came on the heels of Citigroup, Inc.’s news that it had made a healthy profit during the first two months of 2009. At the end of the day, the stock market had soared to a 6,926.49 close.
So, what did it? It wasn’t a bold move by Treasury Secretary Timothy Geithner. It wasn’t the American Recovery and Reinvestment Act. It wasn’t hope. It wasn’t a government plan.
The catalyst that triggered the 5.8 percent Dow Jones Industrial Average stock market rise was honest-to-God good news. The revelation was in the form of a leaked memo written by Citigroup CEO Vikram Pandit stating that the banking giant had enjoyed its best financial performance in more than a year. The memo, written to reassure the bank’s employees about its stability, said that Citigroup had recorded an operating profit of $8.3 billion before taxes and special items through the end of February. This was Citigroup’s best performance since the third quarter of 2007 and puts it into a sound cash position.
The memo did not detail what the special items involved, but they could include credit losses and writedowns. Still, the news kicked off a buying frenzy. Worldwide financial stocks rose, with Citigroup up 38 percent for the day.
Broader indices like the Standard & Poors 500 index rose 43.07 to 719.60; NASDAQ soared 89.64 points to 1,358.28.