Wall Street surges on economic news - East Valley Tribune: Business

Wall Street surges on economic news

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Posted: Wednesday, April 2, 2008 1:02 am | Updated: 10:34 pm, Fri Oct 7, 2011.

NEW YORK - Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks, optimistic that the worst of the credit crisis has passed and that the economy is faring better than expected. The Dow Jones industrials surged nearly 400 points, and all the major indexes were up more than 3 percent.

Financial stocks were among the big winners after Lehman Brothers Holdings and Switzerland's UBS AG issued new shares to help bolster their balance sheets. With that upbeat news and a fresh quarter ahead of them, investors appear quite willing to make some bets that the worst of the damage from the nation's credit struggles has been felt.Moreover, the banks' moves buttressed the view that financial services companies are taking aggressive action to improve their capital bases and stave off the potential of a collapse similar to Bear Stearns Cos. Analysts believe there must be a recovery in bank and brokerages to lead major stock indexes higher.

Meanwhile, Wall Street got another boost when the Tempe-based Institute for Supply Management said its March index of national manufacturing activity rose to a reading of 48.6 - indicating a contraction, but a slower one than in February and tamer than many analysts had predicted.Government data on construction spending for February also came in better than expected.

The Dow rose 391.47, or 3.19 percent, to 12,654.47.It marked the eighth-biggest point gain ever for the Dow, and the third time in two weeks it came close to or surpassed 400 points.

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