Brightening news about the economy sent
investors rushing into stocks today and sent the Standard & Poor’s 500
index above the break-even point for the year.
The S&P 500 soared 29.7 points to 907.23,
an increase of 3.4 percent during the day and 0.44 percent for the year.
The Dow Jones industrial average jumped 214
points, or 2.6 percent, to 8,426.74, and the NASDAQ composite index rose 44
points, or 2.5 percent, to 1,763.56.
Gains in housing, financial and materials
stocks pushed market indicators up. Investors have been more upbeat about
prospects for the economy for the last two months and today’s reports bolstered
the case that the economy’s slide could be slowing.
Two new economic nuggets added to demand for stocks. Pending
expected to post their second straight monthly gain, while construction
spending rose unexpectedly in March after five straight decreases.
Separately, the Commerce Department said construction spending rose 0.3
percent, the best showing since a similar increase last September. Economists
surveyed by Thomson Reuters had expected spending to drop 1.5 percent.
David Kelly, chief market strategist at JPMorgan Funds, said each piece of
better-than-expected economic news is easing worries that the recession would
“It’s like watching the market’s blood pressure come down,” he said.
“Every day that goes by without something bad happening is reducing the
risk of an economic rebound getting derailed.”
The market’s enthusiasm will be put to several tests this week including the
April employment report, one of the most closely watched economic indicators,
which comes out on Friday.
Another concern for the market is the
release Thursday of the results of the government’s “stress tests” on
the 19 largest
financial companies. Some analysts have worried in recent weeks that renewed
anxiety about the state of the financial system could upend the market’s
powerful two-month advance.
But investors set aside some worries about big financial companies even as
analysts predict that the tests – designed to determine which banks would need
more cash if the recession worsens – will show that several banks need more