Stocks rallied anew today as financials continued their revival and crude oil prices retreated below $130 a barrel.
The Dow Jones industrial average closed up 207.38, or 1.85%, at 11,446.66; the S&P 500 rose 14.95, or 1.2%, closing at 1,260.31; and the Nasdaq composite was up 27.45, or 1.2%, to close at 2,312.30. All numbers are preliminary.
Further recovering from their brutal slide of last week, mortgage lenders Fannie Mae and Freddie Mac each gained more than 20%. Lehman Brothers Holdings Inc. jumped as well and has regained 50% of its value since setting a multiyear low July 15. The KBE exchange-traded fund that follows banks gained 10%, lifted by JPMorgan Chase & Co.’s encouraging second-quarter profits, while the XBD broker-dealers index gained 7%.
On the New York Mercantile Exchange, the Light Sweet crude oil contract for August delivery dropped by more than $5 a barrel to close at $129.29, 12% down from the all-time high of $147.27 set on July 11.
The market shrugged off the latest batch of weak economic news, including a spike in jobless claims, which Robert Brusca, chief economist at FAO Economics, said pointed to a recession.
“We use averages of jobless claims to create signals for starting and ending recession,” Mr. Brusca said. “The current signal is still essentially turned on for the 16th month in a row in this string of signals.”
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