- The Washington Times - Thursday, March 5, 2009

Wall Street ignored a grim Federal Reserve survey about the economy and rebounded strongly Wednesday after the release of the Obama administration’s plan to prevent housing foreclosures and reports that China plans to announce a major stimulus package.

The three major indexes each surged more than 2 percent, breaking a losing streak that ran for five trading sessions but coming off their highs for the day that pushed their gains beyond 3 percent. The benchmark Standard & Poor’s 500 Index climbed above 700 after dropping Tuesday to its lowest point since 1996.

At the close, the Dow Jones Industrial Average jumped 149.82, or 2.2 percent, to 6,875.84. The tech-heavy Nasdaq Composite Index soared 32.73, or 2.5 percent, to 1,353.74. The S&P; 500 climbed 16.54, or 2.4 percent, to 712.87. The Russell 2000 Index of smaller companies rose 10.29, or 2.9 percent, to 371.30.

Commodity, energy and high-tech stocks led the way higher, with chip-maker Intel Corp. up about 4 percent and Cisco Systems Inc. soaring nearly 6 percent. Some bank stocks got hit, with General Electric Co. down 4.5 percent because of its capital arm, Citigroup Inc. off 7.3 percent and Wells Fargo down 9.4 percent.

Volume was heavy at 8.8 billion shares, signifying that more investors were going back into the market.

April futures contracts for a barrel of light, sweet crude oil spiked more than 8 percent to close at $45.38 on the New York Mercantile Exchange. Gold fell again, nearing $900 ounce; it reached a high of more $1,000 an ounce last week.

The markets shrugged off a Federal Reserve survey based on information given to its 12 regional banks saying that the recession slumped further in the first two months of the year. But Wall Street knew that, having been in the doldrums because of the crisis in the financial industry and weak corporate earnings.

The Treasury Department released details of the administration’s $75 billion housing plan that first was announced last month, providing instructions to lenders who can help up to 9 million homeowners stay in their houses with refinanced loans structured so that their monthly payments are no more than 31 percent of their monthly gross income.

Wall Street also got a boost from hopes that China will announce a major stimulus package that investors view as a possible instrument to help limit the recession plaguing the entire industrialized world.

At the same time, another private group, the Institute for Supply Management of Tempe, Ariz., said its index of the 18 industries in the service sector fell to 41.6 in February from 42.9 in January, a reading slightly above expectations by economists. Any reading below 50 indicates contraction.

The index shows “contraction in the non-manufacturing sector for the fifth consecutive month at a slightly faster rate,” the report said.

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