Stocks Stage Huge Rebound; Dow Jumps 553 Points

Specialist Peter Elkins, center, works at his post on the floor of the New York Stock Exchange Thursday, Nov. 13, 2008.

(Richard Drew/AP Photo)

Investors did an abrupt turnaround on Wall Street Thursday, muscling the Dow Jones industrial average up more than 550 points after driving it down near its lows for the year on a stream of negative economic and corporate news.

After three days of selling that wiped out about $1 trillion in shareholder value, many investors, though nervous about a prolonged economic downturn, appeared convinced the market had priced in enough bad news. So when the Standard & Poor's 500 index — the indicator most watched by traders — managed to recover from multiyear trading lows, buyers swarmed back in.

It's "a herd mentality," said Ryan Larson, senior equity trader at Voyageur Asset Management. "We started going higher — and you don't want to be the last one on the boat."

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The market was following in dramatic fashion its pattern of huge price reversals, one that was set early in the now 15-month-old credit crisis and that has become almost the norm on Wall Street.

Some analysts said investors were positioning themselves ahead of a meeting of Group of 20 leaders in Washington. The meeting could bring decisions on mending the troubled global financial system. The G-20 includes the U.S., Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.

There was "some anticipation that we'll hear some good news from that meeting," said Jack A. Ablin, chief investment officer at Harris Private Bank. Thursday's rally was "part hopeful, part technical. But certainly welcome."

As stocks rallied, so did oil prices, sending shares of energy companies higher. The biggest gainer among the 30 Dow companies was Chevron Corp., which rose $8.43, or 12.5 percent, to $75.71. Another big gainer was Exxon Mobil Corp., which climbed $6.48, or 9.4 percent, to $75.41; these two energy stocks represented one-fifth of the Dow's point gain Thursday.