Stocks have come off their highs of the day during Monday's mid-afternoon trading but continue to show considerable strength as investors respond to some positive economic and corporate news as well as Treasury Secretary Geithner's latest plan to help the troubled financial sector.
Earlier, details of Geithner's plan were announced, with the latest measure involving setting up an investment fund to buy mortgage-related securities and other assets that are hurting the balance sheets of banks.
The new Public Private Investment Program would combine taxpayer money with private funds, aiming to buy loans and free up banks to renew lending.
In an interview with RTT News, Hugh Johnson, chief investment officer for Johnson Illington Advisors, expressed a little bit of skepticism about Geithner's bad asset program.
I don't know if it can do the trick - I have my doubts, he said. Johnson added, There's no question that the plan is positive and to some extent will certainly help strengthen bank balance sheets, but he emphasized that until we see a recovery in loan demand, it's not likely to lead to a big increase in lending as well as a recovery in the economy.
The major averages have been rangebound in recent trading, hovering firmly in positive territory but off their best levels of the day. The Dow is currently up 283.15 at 7,561.53, the Nasdaq is up 51.40 at 1,508.67 and the S&P 500 is up 30.27 at 798.81.
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