Talks that the Irish government had agreed to a bailout package and General Motors' successful initial public offering gave investors reason to cheer after a slew of unnerving news about the global economy. The optimism fueled a rally in blue-chip stocks and sent the Dow average to a 173-point gain, helping it retrace almost all of Tuesday's losses.
Investors had more than one reason to feel enthusiastic about as General Motors GM, coming out of bankruptcy, raised $20 billion in the largest initial public offering in the U.S. history. The automaker, often invoked as a symbol of corporate America, saw its shares surging 9% in opening trade. However, by the close, the shares lost much of those gains and closed at $35, above the offering price of $33.
Meanwhile, talks emerged that Ireland had moved closer towards accepting a bailout package and becoming the second European country to seek financial assistance this year. The reports of the bailout eased concerns about debt problems plaguing eurozone countries and helped investors heave a sigh of relief. In May this year, a rescue package from the International Monetary Fund and the European Union saved Greece from defaulting on its debts.
The Dow average's 178-point plunge Tuesday had threatened the 11000 level, but positive signals from Europe and easing concerns on China helped boost sentiments and pushed the 30-share index to 11181.23, up 1.6% on the day. The tech-laden Nasdaq Composite index rose slightly more than 38 points, or 1.6%, to 2514.40. The widely followed S&P's 500-stock index gained 18.10 points, or 1.5%, to 1196.69. On the New York Stock Exchange, about five stocks rose in price for every one that advanced.
The demand for Treasury bonds fell, sending prices lower and the corresponding yields higher. The yield on the benchmark 10-year note rose to 2.90% from 2.87%. The dollar fell 0.6% against a basket of currencies.
All ten S&P 500 industry sectors market gains on the day, led by basic materials (+2.3%), oil and gas (+2.1%), tech (+1.8%), and industrial (+1.8%) sector shares.
Alcoa AA led the DJIA higher, surging 3.4% after the company's CEO said the company expects aluminum demand to grow 6.5% annually and double by 2020. Shares in Boeing BA jumped 3.4% even as Airbus said the delay in the Dreamliner project was giving competitors an advantage.
Commodity prices jumped, as dollar weakened. Crude prices rose $1.41 or 1.8% to $81.85. Gold prices climbed 1.2%, for a $16.10 advance to $1353. Copper gained 2.7% and silver 5.2%.
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