- The Washington Times - Thursday, January 22, 2009

Wall Street staged a rally led by high-tech stocks Wednesday to recover most of its losses from a disastrous Inauguration Day plunge in the financial sector. Many bank stocks also rebounded.

Two of the major market indexes soared more than 4 percent, and the Dow shot past the 8,200 mark in what CNBC said marked the Dow’s best day since Dec. 16.

At the close, the Dow Jones Industrial Average had surged 279.01 points, or 3.51 percent, to 8,228.10. The tech-heavy Nasdaq Composite Index had shot up 66.21, or 4.60 percent, to 1507.07. The broader Standard & Poor’s 500 had climbed 35.02, or 4.35 percent, to 840.24.

The markets started the day higher, feeding off IBM’s announcement after Wall Street closed Tuesday that its earnings per share for the fourth quarter of 2008 were $3.28, far above the $3.03 that analysts had predicted. From there, it was rebound time.

Shares of IBM jumped 11.5 percent in what CNBC said was its best one-day showing since January 2001. Apple climbed nearly 6 percent; Microsoft rose nearly 5 percent.

The troubled financial sector, where the woes are far from over, came back smartly, possibly because of optimism riding on President Obama’s proposed $825 billion stimulus package that is before the House Appropriations Committee.

The panel’s chairman, Rep. David R. Obey, Wisconsin Democrat, said there was a “reasonable probability” that more money will be needed in order to turn the economy around quickly.

But committee Republicans want to meet with Mr. Obama to present their own ideas about what should be in the economic recovery plan.

At the same time, the markets appeared to react to some optimism that Treasury Secretary-designate Timothy Geithner will be confirmed by the Senate after his hearing before the Senate Finance Committee. He apologized for his initial failure to pay $34,000 in self-employment taxes to the IRS earlier this decade.

In the banking sector, shares of Bank of America soared 31 percent after it was disclosed that Chief Executive Officer Kenneth Lewis and five of the bank’s directors bought 500,000 shares of the bank Tuesday.

Shares of Citigroup, which named Richard D. Parsons, the former chairman of Time Warner, as its next chairman, also jumped 31 percent. JP Morgan Chase leaped 25 percent, and Wells Fargo gained 17 percent.

PNC Financial Services Group Inc. surged more than 37 percent on news that it expected to show a profit for all of last year, even though it posted a loss for the fourth quarter. And Bank of New York Mellon climbed more than 22 percent after it said it showed a profit for the last three months of 2008.

The price of a barrel of light, sweet crude went up more than $3 to over $43 on the New York Mercantile Exchange, possibly because the Organization of Petroleum Exporting Countries’ decision to cut production by 2 million barrels a day was beginning to have an effect. That cut in production eventually will mean higher gas prices at the pump.

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