Wall Street stocks surge following strong global rally
— -- Stocks enjoyed a much-needed rally Monday with the Dow Jones industrial average soaring more than 700 points in late afternoon on optimism governments around the world can stabilize the financial system.
The Dow, Nasdaq composite index and Standard & Poor's 500 indexes all soared more than 8% as investors hoped the many efforts by central banks to strengthen banks would begin to kick in. The rally in U.S. stocks snapped an eight-day sell-off and comes after strong showings in Asian and European markets as investors applauded the move toward a global coordinated response to the financial crisis.
The rally also comes just as investors' nerves were seriously worn down by what had been the worst week for stocks in history. Last week, the Dow fell 1874 points, or 18.2%, the deepest loss in a one-week period in history.
Much of the rally came from strength in the financial and materials stocks.
In late afternoon trading, the Dow Jones industrial average rose 712.05, or 8.43%, to 9,163.24. It was the Dow's largest-ever point gain during a session, surpassing the jump of 503.45 points seen on Sept. 30.
The Dow's largest point increase by the time the closing bell sounded occurred March 16, 2000, during the waning days of the dot-com boom, when the blue chips closed up 499.19, or 4.93%.
Broader stock indicators also jumped Monday. The Standard & Poor's 500 index advanced 78.71, or 8.75%, to 977.93, and the Nasdaq composite index rose 146.86, or 8.90%, to 1,796.37.
About 2,900 stocks advanced on the New York Stock Exchange, while about 250 declined. But the trading volume of 1.22 billion shares was lighter than it had been last week, suggesting there was less conviction in the buying than during last week's selling.
Governments around the world have been taking unprecedented steps to calm investors and coax banks to lend. Late Friday, Treasury Secretary Henry Paulson announced plans for the U.S. government to inject capital into banks in exchange for partial ownership.
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