Updated from 4:22 p.m. EDT
Stocks in New York enjoyed outsized gains Tuesday, rocketing ahead more than 5%, with financials leading the ascent.
Dow Jones Industrial Average
rose 379.44 points, or 5.8%, to 6926.49, and the
moved higher by 43.07 points, or 6.4%, to 719.60. The
was up 89.64 points, or 7.1%, to 1358.28.
"Of course we're in an oversold condition, but it's too early to say this is a bottom," says Peter Cardillo, chief market economist at Avalon Partners. "We can say it's a breath of fresh air."
All of the Dow's components gained. Shares of
Bank of America
added 27.7% and 38.1%, respectively, while
JP Morgan Chase
rose 22.6%. Financials in general got a bounce, with the KBW Banking Index rising 15.6%.
chief Vikram Pandit offered some early reassurance to investors and the market, saying the bank has had a strong start to 2009. Nonetheless, U.S. officials are reportedly examining what new steps they might need to take to stabilize
if conditions worsen for the bank, according to a
Wall Street Journal
report, which called the talks "contingency planning."
The Treasury Department already has a 36% stake in the troubled U.S. bank, which dipped below $1 a share briefly last week.
"Pandit's comments are very encouraging," says Kenneth Roberts, a principal at Harbor Lights Financial. "But we're still in for a long, hard road."
The remarks came just before
spoke before the Council on Foreign Relations on the oversight of U.S. banks. Bernanke said the financial regulatory system on the whole must be overhauled, rather than simply focusing on individual troubled companies.
Bernanke also urged the governments of the world to take "coordinated and forceful action" to deal with the ongoing downturn.
Cardillo believes we're starting to see "some of the negative rhetoric from Washington change course a bit, and this market is starving for that." In particular, "Treasury Secretary Tim Geithner came out with a fairly strong statement yesterday saying that the plans that have been put in place will eventually help the economy."
Stocks got an added boost after
reported that Rep. Barney Frank (D., Mass.) believes the
might be restored within a month. The uptick rule hasn't been in effect since 2007, and some market observers believe that has allowed unfettered short-selling to take down shares. Before the rule was repealed, a short sale could only come after a move higher in a security's price.
In corporate news,
surged after the company raised $8 billion in federally backed debt, easing investor fears about capital levels at its finance arm. Its shares added 19.7% to $8.87.
Another bright spot,
said it would add 3,000 jobs in 2009 and invest $17 billion to $18 billion primarily to help its wireless and broadband businesses. Its shares moved up 9% to $23.60.
The rally followed a pullback Monday, a session in which Wall Street failed to advance despite news on a trio of mergers.
made a $41 billion bid for its cholesterol-drug partner
Rohm & Haas
to merge by April 1, and
and Roche are reportedly nearing
on Roche's prospective takeover.
On the tech side,
added 6.6% to $88.63. The Mac maker could launch a
by the second half of this year, according to
. The small, portable and lower-priced devices would compete with netbooks being marketed by Asus,
In commodities, oil lost $1.36 to settle at $45.71 a barrel, and gold fell $22.10 to $895.90 an ounce.
Longer-dated Treasuries were dropping. The 10-year note was losing 1-6/32 to yield 3%, and the 30-year was giving up 2-27/32, yielding 3.7%. The dollar was weaker.
Stocks overseas were largely higher. The FTSE in London and the DAX in Frankfurt rose 4.8% and 5.3%, respectively. In Asia, Hong Kong's Hang Seng lost 0.4%, but Japan's Nikkei moved up 3.1%.