U.S. Stocks Jump

U.S. stocks surged as President Barack Obama’s plan to shore up lenders and Bank of America Corp. share purchases by company executives sent financial equities to their biggest rally in two months.
TradingEconomics.com, Bloomberg 1/21/2009 2:42:07 PM

Bank of America jumped 31 percent, the most since at least 1980, after Chief Executive Officer Kenneth Lewis and five directors bought shares. Citigroup Inc. and JPMorgan Chase & Co. rallied more than 25 percent, helping the S&P 500 Financials Index rebound from its lowest level since 1995 with a 15 percent gain. International Business Machines Corp. climbed 12 percent on a 2009 profit forecast that topped analysts’ estimates.

The Standard & Poor’s 500 Index rose 4.4 percent to 840.24, its steepest gain since Dec. 16. The Dow Jones Industrial Average added 279.01 points, or 3.5 percent, to 8,228.1. The Russell 2000 Index climbed 5.3 percent.

With today’s advance, the S&P 500 pared its decline this month to less than 7 percent, still the benchmark index’s second-worst start after last year’s 9.8 percent drop during the first 13 trading days. U.S. stocks sank yesterday, sending the Dow average to its biggest Inauguration Day decline, as speculation banks must raise more capital pushed financial shares down 17 percent.

The benchmark index for U.S. stock options fell the most since October, reflecting lower prices for contracts used to hedge against declines in the S&P 500. The VIX, as the Chicago Board Options Exchange Volatility Index is known, retreated 18 percent to 46.42.

Europe’s Dow Jones Stoxx 600 Index dropped 0.6 percent, while the MSCI Asia Pacific Index slid 0.7 percent.