Stocks Finish With Surprise Bounce
NEW YORK (TheStreet) - Stocks finished a choppy trading session sharply higher on Tuesday as the prospect of a new plan to recapitalize European banks fueled a furious rally in the final hour.
The Dow Jones Industrial Average saw a nearly 400-point turnaround, surging from 10,432 shortly after 3 p.m. ET to settle up 153 points, or 1.4%, at 10,809 when the closing bell sounded.
The S&P 500 finished up 25 points, or 2.2%, at 1124. The index dropped into bear market territory during the session, touching a one-year intraday low of 1,075 in the morning that put the index down 21.4% from the year's closing high of 1,364 in late April. The tech heavy Nasdaq gained 67 points, or 3% at 2405.
What seemed like a rally after a morning speech by Federal Reserve Chairman Ben faded by the afternoon. The three major averages were languishing in negative territory prior to the turnaround that followed a Financial Times report that European finance ministers are debating ways to cooperate and recapitalize eurozone banks.U.S. banks, battered in recent days, led the turnaround with Morgan Stanley (MS), Goldman Sachs (GS) and Bank of America (BAC) all climbing into the positive territory by the close. "Positive European headlines have been few and far between and ultimately, today's rally was spurred by a headline and not the actual implementation of a policy decision," wrote Dan Greenhaus, chief global strategist from BTIG. "If we can rally off of the former, imagine what the latter might do?"
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