Stocks See Sharp Gains; Nasdaq Ramps 4%
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Stocks started stronger Tuesday and didn't look back, closing at the highs of the session.
The positive movement in stocks was related to a combination of items: relative calm in the Eurozone, anticipation of Friday's Jackson Hole meeting, a drop in gold, FDIC problem list shrinkage, short covering and bargain hunting.
The Dow closed up 322 points, or 3 percent, to 11,177. It was the largest one-day points and percentage gain in the Dow since August 11, 2011. The Nasdaq surged 4.3 percent to 2,446 and the S&P 500 ramped 3.4 percent to 1,162.
After climbing all session, stocks briefly dipped midday after an 5.9-magnitude earthquake hit the East Coast of the U.S. However, with little damage reported from the quake, stocks picked up momentum as the day progressed.
The beaten-up financial sector was a bright spot. The sector rose 3.2 percent, as represented by the move in ETF Financial Select Sector SPDR (NYSE: XLF). Despite positive movement in the sector, Bank of America (NYSE: BAC) sharply underperformed the group as fears over capital levels continue to weigh on the stock.
With the banking sector still a sore spot for the market, investors were buoyed after the FDIC reported its problem bank list shrunk for the first time since 2006.
On Friday, Federal Reserve Chairman Ben Bernanke will deliver his much-anticipated speech in Jackson Hole. Some expect Bernanke to provide an outline for what QE3 will look like. One item that has been tossed around is a change in the composition of the Fed's balance sheet. The Fed could sell its securities which mature over the next two years and buy Treasuries in the 10-to-30 year part of the curve. The Fed could also apply Treasury rate caps, set a price level or nominal GDP target, or intervene in non-government securities markets.
Tuesday's sell-off in gold was also seen as a positive for stocks as investors exited positions in the precious metal and put money to work elsewhere. Gold last traded down $59 per ounce to $1,830.70.
The positive movement in stocks was related to a combination of items: relative calm in the Eurozone, anticipation of Friday's Jackson Hole meeting, a drop in gold, FDIC problem list shrinkage, short covering and bargain hunting.
The Dow closed up 322 points, or 3 percent, to 11,177. It was the largest one-day points and percentage gain in the Dow since August 11, 2011. The Nasdaq surged 4.3 percent to 2,446 and the S&P 500 ramped 3.4 percent to 1,162.
After climbing all session, stocks briefly dipped midday after an 5.9-magnitude earthquake hit the East Coast of the U.S. However, with little damage reported from the quake, stocks picked up momentum as the day progressed.
The beaten-up financial sector was a bright spot. The sector rose 3.2 percent, as represented by the move in ETF Financial Select Sector SPDR (NYSE: XLF). Despite positive movement in the sector, Bank of America (NYSE: BAC) sharply underperformed the group as fears over capital levels continue to weigh on the stock.
With the banking sector still a sore spot for the market, investors were buoyed after the FDIC reported its problem bank list shrunk for the first time since 2006.
On Friday, Federal Reserve Chairman Ben Bernanke will deliver his much-anticipated speech in Jackson Hole. Some expect Bernanke to provide an outline for what QE3 will look like. One item that has been tossed around is a change in the composition of the Fed's balance sheet. The Fed could sell its securities which mature over the next two years and buy Treasuries in the 10-to-30 year part of the curve. The Fed could also apply Treasury rate caps, set a price level or nominal GDP target, or intervene in non-government securities markets.
Tuesday's sell-off in gold was also seen as a positive for stocks as investors exited positions in the precious metal and put money to work elsewhere. Gold last traded down $59 per ounce to $1,830.70.
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