Another crazy day in the markets
NEW YORK (AP) -- A late afternoon surge capped another wild day on Wall Street Tuesday and prevented the S&P 500 stock index from entering a bear market. Stocks jumped on reports that European officials were working to prop up the region's st...
NEW YORK (AP) -- A late afternoon surge capped another wild day on Wall Street Tuesday and prevented the S&P 500 stock index from entering a bear market. Stocks jumped on reports that European officials were working to prop up the region's struggling banks.
The Dow Jones industrial average was down nearly 200 points with 40 minutes of trading left. It closed up 153.
Indexes opened sharply lower as traders worried that the government of Greece could be closer to defaulting on its debt. They pared their losses at midday after Federal Reserve Chairman Ben Bernanke told a Congressional panel that the central bank could take more steps to stimulate the economy, then slumped again in the afternoon.
At 3:25 p.m., the market began rising quickly after news outlets reported that European financial ministers were working on a way to coordinate their efforts to support European banks, as they did during the financial crisis in 2008. Worries that European and perhaps U.S. banks could get hammered by a Greek default have been a major concern among investors.
"Right now fear is trumping fundamentals and people are buying on nothing more than rumors," said Mark Lamkin, head of Lamkin Wealth Management. "It's not business risk that the market is concerned with, it's systemic risk. If there truly is a solution to Europe's problems, then we'll set the stage for a nice rally."
The Dow closed with a gain of 153.41, or 1.4 percent, to 10,808.71.
The Standard and Poor's 500 rose 24.72, or 2.2 percent, to 1,123.95. It had been as low as 1,074, which was 21 percent below its April 29 peak of 1,363. Had the index closed with a decline that size it would have met the typical definition of a bear market.
The technology-focused Nasdaq composite rose 68.99 points, or 3 percent, to 2,404.82.