Dow Has Second Largest Point Gain Ever
October 28, 2008 - 4:53 PMWall Street had another astounding advance Tuesday, with the Dow Jones industrials soaring nearly 900 points in their second-largest point gain ever as late-day bargain hunters stormed into the market. The Dow and the Standard & Poor's 500 index were each up nearly 11 percent.
There didn't appear to be any one catalyst for the surge that saw the Dow nearly double its gain in the last hour of trading. Many analysts said investors were grabbing up stocks in the belief that the market had fallen too far in recent sessions. Some said buying early in the day came from anticipation of an interest rate cut Wednesday by the Federal Reserve.
"There is nothing fundamental that came out today or yesterday that would take it up or down. We're all groping for something meaningful to talk about," said Bob Andres, chief investment strategist at Portfolio Management Consultants.
But given the relentless volatility in the market - out of 20 trading days this month, there have been only two that didn't see the Dow close up or down in triple digits - no one expects that the market is now headed higher for good.
"I don't think it will be a sustained move," said Matt King, chief investment officer at Bell Investment Advisors.
It was clear that investors wanted to buy - they looked past news of a sharp drop in consumer confidence early in the session. The Conference Board said its index of consumer confidence has fallen to 38 in October, well below the 51 analysts expected.
According to preliminary calculations, the Dow rose 889.35, or 10.88 percent, to 9,065.12. That was its second-largest point gain, coming after the 936 points the Dow jumped on Oct. 13.
Broader stock indicators also surged. The Standard & Poor's 500 index rose 91.59, or 10.79 percent, to 940.51, and the Nasdaq composite index rose 143.57, or 9.53 percent, to 1,649.47.
The Russell 2000 index of smaller companies rose 34.15, or 7.62 percent, to 482.55.
Advancing issues outnumbered decliners by more than 4 to 1 on the New York Stock Exchange, where volume came to a moderate 1.72 billion shares.
"I guess we're just coming out of this oversold situation. I think you've got a lot of players on the sidelines," said Dan Demming, trader at Stutland Equities in Chicago. "There's just no one standing in a way right now."
He contends investors are also anticipating an interest rate cut.The Fed is expected to cut its target fed funds rate by half a point to 1 percent.
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