Second-biggest point gain in Dow's history

 

Wall Street stocks rose 288 points yesterday after two selling sessions, but the Dow Jones industrials recovered less than a third of its 1,000-point loss over the previous four trading days.

The Dow industrial average rose 288.36 - or 3.8 per cent - at 7,827.43, the second-biggest point gain in history.

Broad indexes were also higher, as many of the big losers of Monday came roaring back, including technology and consumer stocks.

Volume was very high, with about a billion shares changing hands on the New York Stock Exchange.

Traders and analysts said they were relieved at the strength in the market, but were unwilling to call it a permanent comeback for stocks.

"Although spirits have lifted, there's still a lot of edginess or tension," said Hugh Johnson, chief strategist at First Albany Corp.

"We've seen head fakes before, where it appeared as though the market had stabilised or was recovering, and in fact it wasn't, and it was soon to be followed by bad news."

Johnson noted a lack of breadth to the recovery. Advancers led decliners by a slim margin on the Big Board. Volume was heavy at around one billion shares for the Big Board, substantially higher than Monday's pace.

After a choppy morning that saw the Dow go up and down twice and at one point post a loss of 138 points, individual and institutional investors got into a buying groove in late morning and pushed the indexes higher.

Traders arrived at work to see that Monday's market rout had not spilled into Asia, where investors had taken the Nikkei average up 1.9 per cent in Tokyo.

The buying was also spurred by analysts' comments in the morning. Although Merrill Lynch reportedly had a downbeat report for its major clients, at least two prominent Wall Street analysts said they viewed Monday's rout as a buying opportunity.