The Dow Jones industrial average rose more than 330 points on Wall Street yesterday, its biggest one-day gain ever, as investors shrugged off a historic market plunge and jumped at the cheap prices now available. The Dow rose 337.17 to close at 7,498.32.
Volume rose to a record 1.1 billion shares on the New York Stock Exchange. Broad-market indexes, meanwhile, staged an incredible recovery from an early morning slump.
"Stocks got down to a price that no one wanted to sell them any more," said one senior trader. "That's when the buying began."
Stocks had plunged at the opening bell, sliding about 178 points in the first minutes of trading. For the fourth straight session, anxieties over Asian economies and a slump in Asian and European financial markets spurred a sell-off in US stocks.
After Monday's plunge investors were braced for another dismal session. The Dow fell 554.26 points on Monday, its biggest point drop ever, while the Nasdaq was down 7 per cent. But the free-fall in US stocks did not last long. Shortly after 10 a.m. prices began to bounce back as investors looked to buy stocks at much lower prices than were available just last week.
Also boosting the market was an announcement from International Business Machines that it would buy up to $3.5 billion worth of its own stock. In addition, news that consumer confidence in the economy fell sharply in October helped reinforce expectations that the Federal Reserve would not move to raise short-term interest rates soon.
US Treasury bonds, however, fell, erasing gains from Monday when investors sought safer places to put their cash until the equity markets steadied. 99151751
Advancing issues outnumbered decliners by 11 to eight on the New York Stock Exchange, with 1,835 up, 1,339 down and 330 unchanged. NYSE volume totalled 1.195 billion shares, against 685.5 million in the previous session.
The Standard and Poor's 500stock list rose 39.24 to 916.22, and the NYSE composite index rose 19.45 at 482.66.
The Nasdaq composite index rose 65.25 to 1,600.34, and the American Stock Exchange composite index rose 9.86 to 670.27.
