Stocks rise as investors show more confidence in economy

NEW YORK -- Stocks rose Thursday as investors grew more optimistic that the economy is on the mend.

The major indexes jumped more than 2%, and the Dow Jones industrials rose more than 150 points, as the world's finance leaders met in London to discuss efforts to fix the global economy. The G-20 ministers plan to give the International Monetary Fund $500 billion, and create stricter rules for hedge funds.

Bank stocks got an especially big boost when the Financial Accounting Standards Board relaxed rules forcing banks to value their assets at current prices. The change should help banks reduce losses.

And the Commerce Department revealed a large increase in February factory orders, following Wednesday's better-than-expected readings on pending home sales, manufacturing activity and auto sales.

There's a growing sense on Wall Street that the economy, at least stateside, might be bottoming out.

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

Since a nearly 12-year low on March 9, the Dow is up about 19%.

The market has managed to shrug off data showing that the job market remains extremely weak. On Thursday, the Labor Department reported a surprisingly large rise in last week's jobless claims, and on Wednesday, data from a research group showed a bigger-than-expected March decline in private sector employment.

Economists predict that Friday's report will show a loss of 654,000 jobs in March.

"It could be a replay of last month, where we expected terrible, we got terrible, and were relieved it wasn't worse," Ablin said.

The Dow Jones Total Stock Market index, which reflects nearly all stocks traded in the United States, has gained 20.2% — or $1.6 trillion — since March 9.

Analysts are quick to point out, however, that stocks are still well below their October 2007 record highs, and that market rebounds are typically volatile. Investors got a taste of volatility on Monday, when stocks dropped sharply as the Obama administration raised the possibility of a U.S. automaker bankruptcy.