Market rallies on positive news

NEW YORK – Investors have been clamoring for months for a bit of good news. On Thursday, they got a load of it.

The Dow Jones industrials shot up 240 points to a two-week high of 7,170, bringing its gains over the past three days to 622 points, or 9.5 percent. It was the index’s biggest three-day jump since last November.

Surprisingly positive signals this week from companies across all industries, particularly banks, have made traders think twice about continuing to drive stocks lower. It’s too soon to tell whether this week’s upturn is the beginning of a bull market or simply a temporary rally within a bear market, but either way there has been a pronounced change in Wall Street’s tone.

“How all this turned around in a week, I don’t know,” said Scott Bleier, president of CreateCapital Advisors. “But it’s certainly a better outlook than how it looked two weeks ago.”

The rally got an extra dose of adrenaline Thursday after an accounting board told Congress it may recommend an easing in financial reporting rules of tough-to-sell assets – a change that banks say would help their bottom lines. Upheaval in the banking industry has been dogging the market since 2007, and hope that banks might finally get relief in how they value their bad assets spurred a flurry of buying on Wall Street.

“We might find that the banks are not as bad, or not bad at all, if these assets are marked differently,” said Doreen Mogavero, president of the New York floor brokerage Mogavero, Lee & Co.

Better-than-expected retail sales figures also helped stocks, as did positive news from four Dow companies: Bank of America Corp., General Electric Co., General Motors Corp., and Pfizer Inc.

GE’s credit rating was cut by less than expected, GM said it will not need a $2 billion loan it previously requested from the government, and Pfizer reported a successful cancer drug trial. Bank of America’s CEO told reporters his bank was profitable in January and February. Citigroup Inc. triggered this week’s rally Tuesday with similar remarks.

No one is calling the end to the selling on Wall Street. The economic picture is too uncertain, and much of this week’s rally has been driven by technical factors. One of those factors is traders’ inclination to buy stock to cover “short” bets, or bets that a stock will fall.

But it’s been the most reassuring week in months for the stock market. The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, has jumped 11.2 percent over the past three sessions. That’s a paper gain of $900 billion.

“There’s a lot of money on the sidelines, and a lot of people who’ve been waiting for the turn to come,” Mogavero said.

“I think that probably, people will want to get some of their money in the market.”

The Dow rose 239.66, or 3.5 percent, to 7,170.06. The Standard & Poor’s 500 index climbed 29.38, or 4.1 percent, to 750.74.