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Stocks extend 4-week rally on G20 boost

(Agencies)
Updated: 2009-04-03 09:54

Traders work on the floor of the New York Stock Exchange in New York, Thursday, April 2, 2009. [Agencies]

The change in "mark-to-market" accounting rules, which should help banks reduce losses, sends another lifeline to the troubled financial industry. Many investors believe financial stocks, which have largely carried the market's four-week rally, are a gauge of when the economy is turning.

Among the biggest advancers in the financial industry Thursday were Wells Fargo & Co., which jumped 85 cents, or 5.9 percent, to US$15.33, and Goldman Sachs Group Inc., which rose US$3.93, or 3.6 percent, to US$114.22. Regional banks also rose sharply.

Related readings:  Stocks soar on strong US numbers  US stocks tumble as automaker plans are rejected  Stocks fall sharply across globe

The conclusion of a one-day summit in London of the world's finance ministers sent stocks to their highest levels in early afternoon trading. While the G-20 leaders did not satisfy calls for new stimulus measures, they pledged an additional US$1.1 trillion in financing to the International Monetary Fund and declared a crackdown on tax havens and hedge funds.

Another positive indicator on the economy also lifted sentiment on Wall Street. Factory orders posted a large increase in February, coming on the heels of better-than-expected readings on pending home sales, manufacturing activity and auto sales the day before.

In other trading, the Russell 2000 index of smaller companies jumped 21.03, or 4.9 percent, to 450.19.

For every three stocks that fell, nearly nine stocks rose on the New York Stock Exchange where consolidated volume came to 7.36 billion shares.

The Dow is still down about 9 percent for the year, while the S&P 500 is down nearly 8 percent. The Nasdaq is up 1.6 percent.

While analysts have warned that the market could retest the lows hit early last month, there's no doubt a growing sense on Wall Street the economy, at least stateside, might be bottoming out.

"The market mindset is: OK, we're not in a tailspin," said Jack A. Ablin, chief investment officer at Harris Private Bank.

The benchmark 10-year Treasury note fell nearly 1 point, sending its yield up to 2.76 percent from 2.66 percent late Wednesday. The dollar fell against other major currencies after the European Central Bank cut its key interest rate by less than expected. Gold prices also fell.

Oil prices benefited from the better-than-expected economic news. Light, sweet crude jumped US$4.25 to settle at US$52.64 a barrel on the New York Mercantile Exchange.

Overseas markets also logged big gains. Japan's Nikkei stock average rose 4.4 percent, while Hong Kong's Hang Seng index jumped 7.4 percent. In Europe, Britain's FTSE 100 rose 4.3 percent, Germany's DAX index rose 6.1 percent, and France's CAC-40 rose 5.4 percent.

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