Markets rally and pile on gains
The Nasdaq surged 4.3 percent and the Dow recorded its best gain in two weeks Tuesday as investors picked up cheaply priced stocks after fears that the U.S. would slip into a recession pounded the market over the last month.
Stocks rose broadly during the day, briefly slipping from their highest levels after an earthquake shook Wall Street and the East Coast.
Exchanges' trading operations and electronic market systems were unaffected by the magnitude-5.9 earthquake that struck Virginia early Tuesday afternoon, market officials told the Dow Jones news wires.
The New York Stock Exchange's downtown New York trading floor wasn't evacuated, nor was Nasdaq's Philadelphia options-trading floor, though NYSE floor officials warned of potential aftershocks.
"It felt like there was a subway train going underneath the building," said broker Jonathan Corpina. He said everyone paused for about 20 seconds before it was "business as usual" again.
The Nasdaq closed up 100.7 points, or 4.3 percent, at 2,446.1. The Dow closed up 322.1 points, or 3 percent, at 11,176.7. It lost about 60 points shortly as the quake rattled the East Coast in the early afternoon, but recovered those losses within minutes. The S&P 500 index ended the day up 38.5 points, or 3.4 percent, at 1162.4.
Exxon Mobil Corp. rose the most of the 30 stocks in the Dow Jones industrial average, 2.7 percent. Chevron Corp. was also up more than 2 percent. Energy stocks got a push from a 1 percent increase in the price of oil, to $85 a barrel. The dollar fell against the euro and Japanese yen as investors moved money into riskier assets.
Stocks rallied despite some weak economic reports. The Commerce Department said the number of people who bought new homes dropped for the fourth month in a row. A survey from the Richmond Federal Reserve bank indicated an economic slowdown but not a recession.
The Richmond Fed survey took on added weight after other bleak manufacturing surveys suggested the U.S. could enter another recession.
The S&P 500 index is on track for its worst August since the Asian financial crisis rattled world markets in 1998. Markets have been falling sharply since late July on signs that the U.S. economy is softening and on a flare-up in Europe's debt crisis.
Major indexes eked out minor gains Monday following a four-week losing streak. During that time there were four days in a row in which the Dow Jones industrial average moved by at least 400 points, the first time that has happened in the Dow's 115-year history.
One measure of the market's swings, the Chicago Board of Options Exchange's volatility index, has soared 54 percent this month. That's a sign investors are anticipating more wide swings in the S&P 500, the stock index most money managers use a benchmark. The index fell 8 percent Tuesday to 39 as concerns about future turbulence eased.
The yield on the 10-year Treasury note rose to 2.11 percent from 2.10 percent late Monday. The yield fell below 2 percent last week, its lowest on record, as investors sought refuge from turmoil in the stock market.
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