US Stocks Jump On Relief Over Gov't Debt Auction

TIM PARADIS

NEW YORK (AP) — Investors are finding fresh reasons to bet on an economic rebound.

Stocks jumped Thursday as gains in commodities like oil signaled that traders expect a strengthening economy will demand more energy.

Ample demand at an auction for Treasury debt also eased fears that the government would have to pay higher interest rates to entice buyers. Higher rates on long-term bonds would also drive up borrowing costs for consumers buying cars and homes, which in turn could endanger an economic recovery.

Major stock indicators rose more than 1 percent, including the Dow Jones industrial average, which gained almost 104 points.

It was the second straight day that interest rate movements called the shots in the stock market, and not likely the last. Analysts expect Wall Street will have to continue to grapple with worries that the government could eventually exhaust buyers' appetite for debt with an unprecedented level of bond sales as Washington funds its bank rescue and economic stimulus measures.

A jittery first half to the day's trading followed a drop a big drop Wednesday because of a spike in long-term interest rates as the yield on the 10-year bond jumped to its highest rate in six months.