U.S. Intervention Could Help Housing Market

Washington, DC, Sept. 19, 2008--Global stock markets soared Friday as news of a possible U.S. government plan to rescue banks from toxic mortgage debt brought hope of a letup in the world's worst financial crisis in decades.

In addition, the Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the short selling of financial stocks.

Congress promised quick action on a plan to buy up toxic assets. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are crafting a plan, which they plan to soon deliver to lawmakers.

The development could go a long way to stabilizing the housing market, which is causing so many problems for the flooring industry.

Hong Kong's Hang Seng Index surged a stunning 9.6 percent to 19,327.73, while Japan's Nikkei 225 average rose 3.8 percent to 11,920.86.

As trading opened in Europe, Britain's FTSE 100 jumped 8 percent to 5,268.70 and France's CAC 40 shot up 6.5 percent. Germany's DAX added 3.9 percent.

Investors also took heart from word that the U.S. government was seeking the power to rescue banks by buying distressed assets at the heart of the financial system turmoil that's brought down Wall Street giants Lehman Brothers, Merrill Lynch and Bear Stearns.

Details of the plan were still being worked out, but U.S. Treasury Secretary Henry Paulson emerged from a nighttime meeting on Capitol Hill to say he hoped to have a solution "aimed right at the heart of this problem."

The biggest bonus of a potential government fix is it could help the banking industry as a whole, said Scott Fullman, director of derivative investment strategy for New York-based institutional broker WJB Capital Group. Until now, the U.S. government has selectively bailed out institutions that were the most vulnerable.

The news triggered a rally in U.S. stock futures, suggesting Wall Street would advance Friday, too. Dow futures rose 245 points, or 2.2 percent, to 11,227, and S&P 500 futures climbed 39 points, or 3.2 percent, to 1,242.

The dollar also rose, advancing to 107.42 yen, while the euro fell to $1.4211. That helped stocks of major exporters like Toyota Motor Corp. and Sony Corp.