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Business Title: Stocks Soar Most in Two Years, S&P 500 Up 4.8% U.S. stocks jumped the most in more than two years, rebounding from the worst drop since 2008, and 10-year Treasury yields touched a record low as the Federal Reserve vowed to keep interest rates near zero through mid-2013. The dollar weakened and the Swiss franc rose the most since at least 1971. The Standard & Poor’s 500 Index jumped 4.8 percent to 1,172.6 at 4 p.m. in New York, its biggest gain since March 2009, after tumbling 6.7 percent yesterday. The 10-year Treasury yield fell as much as 28 basis points to 2.03 percent before trimming its decrease and trading down six basis points at 2.26 percent. The Dollar Index slid 1 percent, while the Swiss franc strengthened as much as 6.5 percent to a record $1.4099. In pledging to keep its benchmark rate at an all-time low, the Fed also discussed a range of policy tools to bolster the economy, saying it is prepared to use them “as appropriate.” The statement fueled speculation the central bank may consider a third round of quantitative easing through bond purchases to revive a recovery that’s "considerably slower" than anticipated. "The Fed is clearly setting up a situation that could offer them the potential to do something significant, if necessary," Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview. "That could be viewed as a positive," he said. "People are starting to realize that what we’ve had in the market was an overreaction." Two-year Treasury yields also touched a record low, dropping as much as 10 basis points to 0.16 percent before trading at 0.20 percent. Thirty-year rates were little changed at 3.65 percent. U.S. stocks rebounded from a rout that wiped out $1 trillion yesterday in the first trading session after the government was stripped of its AAA rating at S&P. The S&P 500 sank 11 percent in the previous three days and started today trading at 12.3 times reported earnings, compared with its average of 16.4 since 1954, according to data compiled by Bloomberg. The MSCI All-Country World Index is valued at about 12 times profits, down from 21 in 1995, the data show. $2.5 Trillion While yesterday’s stock rout wiped out about $2.5 trillion in global equity values, extending total losses since July 26 to $7.9 trillion, the Bank of America Merrill Lynch Global Broad Market Index of bonds has gained $132.4 billion since the end of July to a record $42.1 trillion. Moody’s Investors Service reiterated yesterday that it affirmed the U.S. government’s top Aaa ranking because the dollar’s status as the main reserve currency allows it to support higher debt levels than other countries. Fitch Ratings affirmed its AAA grade for the U.S. last week. The U.S. AA+ rating at S&P is still higher than Japan or China. Billionaire investor Wilbur Ross said he’s buying assets as the losses in global markets are being driven by fear rather than economic reality. “Has the world really gotten 10, 12, 15 percent worse in the last 48 hours? I don’t think so,” Ross, who leads WL Ross & Co., said in an interview with Bloomberg Television. “Buying stocks at today’s prices over a couple of years’ time period will prove to be a uniquely rewarding experience.”
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#1. To: Brian S (#0)
The Dow was up 430 points. Or, as Al Sharton would say, 430 percent
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