AFTERNOON UPDATE: Dow Sees Biggest One-Day Soar in Nearly 70 Years
U.S. stocks staged the biggest rally in seven decades on a government plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars.
The Standard & Poor's 500 Index rebounded from its worst week in 75 years with an 11.6 percent advance, its steepest since 1939, and the Dow Jones Industrial Average climbed more than 936 points. Morgan Stanley soared 87 percent after sealing a $9 billion investment from Japan's Mitsubishi UFJ Financial Group Inc. Alcoa Inc., General Motors Corp. and Chevron Corp. climbed more than 20 percent each as all 10 industries in the S&P 500 added more than 7 percent.
The S&P 500 rose 104.13 points to 1,003.35. The Dow increased 936.42, or 11 percent, to 9,387.61, eclipsing its previous record 499-point gain in March 2000 and posting its best percentage advance since March 1933. The Nasdaq Composite Index increased 194.74, or 12 percent, to 1,844.25. Thirteen stocks gained for each that fell on the New York Stock Exchange.
"You're seeing finally the magnitude of the response that's necessary to restore confidence,'' said Richard Campagna, chief investment officer at Provident Investment Counsel in Pasadena, California, which manages $1 billion. "Off the kind of decline we had last week I would look for a 20 percent move off the low.''
The S&P 500 halted an eight-day losing streak, its longest since 1996. Last week's 18 percent declines pushed both the S&P 500 and Dow down more than 40 percent from their peaks last October. The S&P 500 ended last week trading for 17 times reported earnings of its companies, the cheapest valuation in more than a year.
Europe's benchmark index climbed 10 percent, its best gain ever, helping the MSCI World Index rebound from its worst week on record.
Published on October 13, 2008
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