September 8, 2008 (Monday): Airline Deja Vu; Stocks Rally

For UAL, Old News Isn’t Good News

When stock traders saw a headline saying United Airlines parent UAL was filing for a second bankruptcy, the reaction was swift: Within an hour, the airline’s stock fell to about $3 from over $12 before trading was halted. But the stock drop was a false alarm apparently based on old news that somehow popped up again. United blamed a Chicago Tribune article about United’s 2002 bankruptcy filing that it said appeared on the web site of the South Florida Sun-Sentinel though the owner of both papers said the story was located in the Sun-Sentinel’s archive section. Regardless, others picked up on the story and the old news quickly made the rounds again. (For more on this news, click here, here and here.)

Stocks Rally, DJIA Closes Up at 11,510.74

The day after Fannie Mae and Freddie Mac are saved from near death by the government, stock markets around the world take cheer. The DJIA closes up 289.78 points to 11,510.74, and the S&P closes up 2.05%. Financial stocks lead the way as investors hope the government intervention averts disaster and sparks a recovery in housing and finance. (For more on this news, click here and here.)

A Loan, Again — Not

Something old, something new, yes. But when it comes to borrowing, forget it. According to the Federal Reserve, consumer borrowing growth slowed down in July. It came in at an annual rate of 2.1% — marking the slowest growth seen since December 2007 when consumer borrowing posted 1.9% growth. Sluggish growth in auto loans was a big culprit. Auto makers said demand in July was at its worst level in 16 years. Meanwhile, credit cards saw growth of 4.8% at an annual rate in July – up from 3.5% in June. (For more on this news, click here.)

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