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Continued: Wall Street extends gains; Dow up 100 points
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Advancing issues outnumbered decliners by 4 to 3 on the New York Stock Exchange, where volume came to 2.18 billion shares.
The Dow on Wednesday swung 631.86 points from its low point to its high — its largest single-day reversal in more than five years.
Stephen Carl, principal and head of equity trading at The Williams Capital Group, said Thursday's overall trading reflected a continuation of the bounce that first began on Tuesday, when the Fed lowered its federal funds rate by a steep 0.75 percentage point, or 75 basis points, to 3.5 percent.
He said investors were also encouraged that the government's rebate plan, while not perfect, appeared to be progressing. Still, despite some investors' mostly upbeat mood, uncertainty remained. The market's about-face Wednesday, while certainly a relief for many investors, illustrated the fractiousness that has settled into Wall Street in recent months.
"We still have a long way to go in getting the economy on track," Carl said. "Whether we dip into a recession or not, a lot of things need to be fleshed out in the markets."
Bond prices fell as stocks rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.67 percent from 3.55 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude oil for March delivery rose $2.42 to settle at $89.30 a barrel on the New York Mercantile Exchange after the agreement on the economic stimulus plan. Traders wagered the plan to put money in consumers' pockets could increase demand for oil.
Some of Wall Street's most recent concerns relate to the downgrade from Security Capital and broader unease about the stability of bonds. However, investors also looked to New York state regulators in hopes they can hatch a plan to shore up the bond insurance industry. New York Insurance Superintendent Eric Dinallo said in a statement Thursday it likely will take time to draw up measures to help the industry.
After the Fitch downgrade, Security Capital fell $1.16, or 30.6 percent, to $2.63.
Beyond bond insurers, investors had concerns about the health of corporate profits. Online auctioneer eBay Inc. said late Wednesday its fourth-quarter earnings and revenue showed gains. While the results were stronger than Wall Street had expected, investors were concerned by the company's first-quarter forecast, which fell short of expectations. The stock fell $1.76, or 6.1 percent, to $27.18.
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