- The Washington Times - Thursday, July 31, 2008

NEW YORK | Wall Street soared for the second straight day Wednesday, rallying in the last hour of trading after a rebound in financial stocks and optimism about private sector jobs.

Investors brushed off a sharp jump in oil prices. The Dow Jones industrials rose more than 180 points, bringing its two-day gain to more than 450.

Bank and brokerage stocks, many trading at multiyear lows, turned higher and led the late advance. There was some relief in the market after the Federal Reserve said it would extend and expand its program to lend money to investment banks. The central bank’s move reassured the market that the banks would have cash if they needed it.

Investors have been worried that some of Wall Street’s biggest names will be slashing prices on more of their assets after Merrill Lynch & Co. unexpectedly announced a $5.7 billion write-down late Monday.

“There’s a growing sense that what we saw out of Merrill Lynch is the beginning of the end for the financial cleanup,” said Craig Peckham, market strategist at Jefferies & Co.

Earlier, Automatic Data Processing said private-sector employment rose by 9,000 this month. After seeing jobs disappear by the thousands in recent months, the stock market is eager for any insights into the Labor Department’s take on the job market Friday.

The ADP news helped offset a big spike in the price of oil after a weekly Energy Department report on domestic supplies showed a surprise increase.

Light, sweet crude rose $4.58 to settle at $126.77 on the New York Mercantile Exchange. Oil has fallen sharply, however, since reaching a high above $147 on July 11.

The Dow rose 186.13, or 1.63 percent, to 11,583.69. On Tuesday, the blue chips jumped 266 points, more than wiping out a nearly 240-point loss from the previous session.

Broader stock indicators also surged. The Standard & Poor’s 500 Index advanced 21.06, or 1.67 percent, to 1,284.26, and the Nasdaq Composite Index rose 10.10, or 0.44 percent, to 2,329.72.

Shares of Morgan Stanley and Lehman Brothers Holdings Inc. climbed more than 5 percent, while Citigroup Inc. and Merrill Lynch rose about 2 percent.

Fannie Mae and Freddie Mac, the government-chartered mortgage companies that together hold or back nearly half of all U.S. mortgage debt, also rose on news of the Fed’s latest moves. Fannie Mae advanced 61 cents, or 5.26 percent, to $12.21, while Freddie Mac rose 31 cents to $8.73.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 5.06 billion shares from 5.11 billion in the previous session.



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