U.S. stocks rallied today, snapping a six-session losing streak in a rebound from Mondays slump to 12-year lows.
The Dow Jones industrial average closed up 236.16, or 3.32%, at 7,350.94; the S&P 500 rose 29.81, or 4.01%, closing at 773.14; and the Nasdaq composite was up 54.11, or 3.90%, to close at 1,441.83. All numbers are preliminary.
The rally took place in the face of poor economic data. The Conference Boards consumer confidence index fell in February to an all-time low of 25, down from 37.4 in January. Home prices in 20 large U.S. cities, as measured by the S&P/Case-Shiller index, dropped by a record 18.5% as of December from a year earlier.
Strategist Thomas Lee at JPMorgan Chase said in a note to clients that the S&P 500 index was a trading buy at its closing level of 743.33, the lowest since April 1997. The recent sell-off was tied to fears that some large banks are in such fragile financial shape the federal government could take them over.
Federal Reserve Chairman Ben Bernanke, testifying before the Senate Banking Committee, described the possibility of a U.S. economic recovery as a black-and-white issue.
It (recovery) has to be on the back of a stabilization of the financial system, Mr. Bernanke told lawmakers.
On Wednesday, officials from the Treasury, the Federal Reserve and three federal agencies announced they will start to stress-test banks to establish whether they need additional capital from the private or public sector.