Dow Leaps, Is On Track For Second Day Of Gains
NEW YORK (AP) — An early 200-point charge turned the Dow Jones industrial average positive for the year following a dismal stretch in May.
The Dow surged 211 points to 12,340 shortly after noon Eastern. That's an increase of 1.7 percent.
All 30 Dow stocks were higher, led by Bank of America, up 7 percent. The last time the Dow gained more than 200 points was March 13.
The big jump follows weeks of losses, including a 275-point plunge last Friday set off by a surprisingly weak reading on the U.S. job market. Jim Russell, chief equity strategist at U.S. Bank Wealth Management in Cincinnati, Ohio, said it's natural for the market to have a strong day after an extended beat-down.
"In market language, it's called a technical bounce," he said. "It's consistent with a 'relief rally.' There's no bad news today, so the market goes up. Frankly, it's that simple."
The Standard & Poor's 500 rose 23 points to 1,308. The Nasdaq composite rose 57 points to 2,835.
The gains were broad. Just 14 stocks in the the S&P 500 companies dropped, and every industry group in the index rose, led by energy companies and financial firms. More than eight stocks rose for every one that fell on the New York Stock Exchange.
The dollar fell and Treasury yields rose as investors moved money out of defensive investments. The yield on the benchmark rose to 1.65 percent from 1.57 percent late Tuesday.
U.S. markets followed major European indexes higher as speculation rose that European politicians will take steps to ease the region's debt crisis soon. Benchmark stock indexes rose 2.4 percent in Britain and France. Borrowing costs eased for Spain, another positive sign.
The European Central Bank left its benchmark lending rate unchanged on Wednesday. The central bank has been urged to cut rates to alleviate pressure on Europe's weakened banks and governments, but bank President Mario Draghi has said the bank cannot make up for inaction by governments.
Among stocks making big moves:
— Morgan Stanley jumped 6 percent amid reports that the Blackstone Group and other private equity firms may try to buy a stake in the bank's commodities business.
— UnitedHealth Group gained 2 percent after the health insurer said it will raise its quarterly dividend from 16 cents to 21 cents per share . The board also approved a plan to buy back stock.
— Tempur-Pedic International plunged 47 percent. The mattress maker said it expects quarterly profits to fall by half compared to last year. Tempur-Pedic blamed its competitors' aggressive marketing campaigns and promotions for hurting its sales.