NEW YORK — U.S. stocks rallied on Tuesday, with the Dow average notching its best day in five weeks, as investors focused on reports Germany was considering a rescue package for debt-strapped Greece.
The Dow Jones Industrial Average finished up 150.25
points, or 1.5 percent, at 10,058.64, its best one-day gain in both
point and percentage terms since Jan. 4, the year’s first trading session. At its intraday high just after midday, the blue-chip average posted a gain of 231 points.
“It seems unlikely that the European leadership will leave Greece to fend for itself,” said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Va. “I think the market is more confident that Greece is going to get some support.”
The Dow was led by a 5.4 percent jump in Caterpillar Inc., which was upgraded along with several other industrial names by analysts at Morgan Stanley.
Coca-Cola Co. was also a big gainer among the blue chips, up 2.6 percent after reporting a 55 percent gain in fourth-quarter profit.
The rally provided a welcome break for investors who
had watched major indexes retreat by as much as 8 percent from their
recent highs coming into Tuesday’s action.
The Nasdaq Composite Index rose 1.2 percent.
The S&P 500 ended up 1.3 percent, helped by
gains in every sector, and led by materials and energy stocks, as gold
futures climbed and crude oil futures topped $73 a barrel.
Commodities were boosted by a retreat in the dollar,
which often falls out of favor when investors are in the mood to take
on risk.
In recent action, one euro cost $1.3789, up from $1.3660
late Monday. The broad U.S. Dollar Index was off 0.7 percent. Treasurys
dropped, with the 10-year note off 21/32 to yield 3.641 percent.
Supporting gains, media reports said Germany was working on a plan to help Greece, whose high government deficits have sparked worries about a reprise of 2008’s global financial crisis.
The Wall Street Journal reported that Germany is considering a plan with its European Union partners to offer Greece and other troubled euro zone members loan guarantees in an effort to calm market fears of a default. Read more on Germany and Greece.
It followed a report in The Financial Times Deutschland that Germany was engaged in efforts to help Greece.
Concerns over Greece’s debt load, and that of other weak members of the 16-nation euro zone, had weighed on U.S. stocks for weeks.
Greece’s benchmark index jumped 5 percent, although a pan-European benchmark ended the day unchanged.
Among stocks in focus, Electronic Arts Inc. dropped 8.8 percent after the video-game maker projected a disappointing forecast for the current quarter.
NYSE Euronext rose 5.2 percent after beating analysts’ expectations with a fourth-quarter net profit of $172 million
as the trans-Atlantic exchange operator cost cuts. Its derivatives
business offset the impact of intense competition in trading equities.
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