Investors dived into stocks today as global efforts to end the financial crisis fed the market’s new-found optimism that the economy is on the mend.
Stocks rallied across the board in heavy trading, fuelled by an accounting rule change which could strengthen banks and commitments from world leaders to toughen up regulatory oversight of financial institutions.
The Dow Jones industrials broke through the 8,000 level for the first time since February 9. The Dow ended with a gain of more than 200 points but off its highs of the day ahead of a closely watched monthly report on employment tomorrow morning.
The advance extended a four-week rally that has lifted the Dow 21.9% since early March. Bits of good news about the economy in recent weeks, including better-than expected-numbers on the housing and manufacturing sectors, have given investors more reasons to buy.
The Dow rose 216.48, or 2.8%, to 7,978.08, after earlier rising as much as 314 points.
The Standard & Poor’s 500 index rose 23.30, or 2.9%, to 834.38. The Nasdaq composite index rose 51.03, or 3.3%, to 1,602.63.
Today, industrial and consumer discretionary stocks picked up speed, while demand for safe-haven assets like gold, Treasurys and the dollar plummeted.
“Everyone is in a buying mood,” said Eric Ross, director of research at brokerage Canaccord Adams. “Everyone is feeling good... A lot of this is simply confidence.”
The market has recently managed to shrug off data showing that the job market remains extremely weak, but Wall Street could be in for a nasty surprise tomorrow if the unemployment figures are worse than expected.
Economists currently predict the report will show a loss of 654,000 jobs in March following a decline of 651,000 jobs in February, which was a record third straight month of job losses above 600,000.