Dow Jones surges to largest gain this year
Traders are seen on the floor of the New York Stock Exchange. / CBS/File
(CBS/AP) NEW YORK - The Dow Jones industrial average surged 286 points, its best day this year.
The Dow jumped 2.4 percent to close Wednesday at 12,415. The gain turned the index positive for the year and erased a 275-point plunge set off by a dismal U.S. jobs report last Friday.
Hope that Europe would help ease the region's debt crisis helped launch the rally. A news report said European officials were moving quickly to find a way to rescue Spain's hobbled banks. Speculation that the Federal Reserve might launch another round of bond-buying to help stimulate the U.S. economy also appeared to boost stocks.
In other trading, the Standard & Poor's 500 index rose 30 points to 1,315. The Nasdaq composite index jumped 67 to 2,845.
Seven stocks rose for every one that fell on the New York Stock Exchange. Trading volume was slightly higher than average at 4.1 billion shares.
U.S. Treasury prices fell sharply Wednesday as investors moved money into riskier investments. The 10-year treasury rate fell 50 cents for every $100 invested, lifting its yield to 1.64 percent.
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The euro rose against the dollar Wednesday after the European Central Bank left its benchmark lending rate unchanged.
Some economists expected the ECB to cut rates to help ease Europe's debt crisis, but bank President Mario Draghi said it's also up to governments to come up with a solution. In the U.S., Atlanta Fed President Dennis Lockhart said in a speech Wednesday that monetary actions need to be considered if the economy weakens further.
The Fed has launched two rounds of bond purchases, most recently in August 2010, to lower long-term interest rates and make stocks more attractive to investors.
Lower rates can weigh on a currency, however, by reducing the returns investors get from holding it. With a third round of bond-buying apparently being considered, investors sold dollars.
Traders will be closely watching Fed Chairman Ben Bernanke when he testifies before a congressional committee Thursday. Traders will be looking to see if he offers any hints that the Fed is considering more monetary stimulus.
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