Late-day surge brings stocks into the black
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A topsy-turvy day on the markets ended with a dramatic surge that brought major stock indexes into the black for the first time in three days.
The late-day jump helped bring the Standard & Poor’s 500 index out of bear-market territory, which it entered earlier in the day after falling more than 20% from the highs reached earlier this year.
The S&P 500, the benchmark for many retirement funds, ended the day up 2.3%, or 24.71 points, at 1123.94, after falling more than 2.2% at one point in the morning. A close below 1090.89 would mark an entry into bear-market territory.
The Dow Jones industrial average ended the day up 153.34 points, or 1.4%, at 10,808.64.
Both indexes fell for the previous two days and reached lows for the year on Monday.
The falling prices on Tuesday morning came after European finance ministers indicated that they may be preparing to restructure a Greek bailout plan and force investors to take bigger losses. Leading indexes finished the day down 3.0% in Germany and 2.6% in England.
Later in the day, investors appeared to take heart from Federal Reserve Chairman Ben S. Bernanke’s testimony in front of Congress, where he suggested that the central bank may be willing to take further measures to help support the economy.
Even after the initial response to Bernanke, though, markets first dropped and then rose even more suddenly, defying easy explanations.
At least some of the final rise in prices was credited to news reports that European Union officials are looking at a coordinated recapitalization of the continent’s struggling banks.
One of the only consistent trends over the day was the falling price of gold, which dropped again, recently trading down 3.4% to $1,600.
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-- Nathaniel Popper