NEW YORK >> Bargain hunters sent stock prices surging yesterday, giving the Dow Jones industrials and the Standard & Poor's 500 their best day in five weeks. Lower prices following four weeks of persistent selling as well as an upbeat outlook from McDonald's triggered the buying, which accelerated throughout the day. Bargain hunters pump up Dow
The index jumps 213 after falling last week
By Amy Baldwin
Associated PressThe Dow rose more than 200 points, while the Nasdaq composite and S&P 500 indexes more than wiped out last week's 2 percent losses.
Analysts are hopeful that the upturn indicates the market had reached its extreme lows and will begin to snap back from those levels.
"I think you have more wind at your back," said David Sowerby, chief market analyst at Loomis, Sayles & Co.
The Dow closed up 213.21, or 2.3 percent, at 9,687.42, according to preliminary calculations. It was the Dow's biggest one-day point gain since May 8 when the blue chips rose 305.28. The advance also more than erased last week's 1.2 percent loss.
The broader market was also higher. The S&P 500 soared 28.90, or 2.9 percent, to 1,036.17, its best one-day advance since May 8, when it rose 39.36.
The Nasdaq surged 48.55, or 3.2 percent, to 1,553.29. The last time the Nasdaq had a bigger daily gain was May 14, when it climbed 66.51.
Advancing issues outnumbered decliners more than 3 to 1 on the New York Stock Exchange. Volume was moderate.
The Russell 2000 index, which tracks smaller company stocks, rose 11.67, or 2.5 percent, to 470.74.
Companies that told investors what they've waited months to hear _ that business is improving -- were rewarded yesterday. McDonald's rose 70 cents to $29.82 after saying its second-quarter earnings will exceed analysts' expectations.
Wal-Mart rose $1.36 to $58.31 after saying it expects June's growth in same-store sales, those at stores open at least a year, to be at the upper end of its estimates of 5 percent to 7 percent. Investors were also attracted to stock that won ratings upgrades from investment firms.
Biotech company Amgen climbed $2.52 to $42.70 on an upgrade from A.G. Edwards to "buy" from "hold." Georgia-Pacific rose $1.27 cents to $27.07 after Credit Suisse First Boston upgraded the paper products company to "buy" from "hold."
In technology, Texas Instruments rose $1.24 to $26.64, and Microsoft gained 43 cents to $55.68. With some of the recent sell-off having occurred despite positive economic news, analysts are hoping the market is finally responding to signs that a recovery is under way.
"It is becoming more clear that the (economic) recovery is real and that improvement in corporate profitability is coming in the second half of the year. ... We have been waiting to see a point where the market would reflect the good news on the economy," said Jim Weiss, chief investment officer for equities at State Street Research and Management Co. in Boston.
And while gains were largely in reaction to weeks of widespread selling, some analysts detected a somewhat better tone to the buying.
"There is a meaningful upside to the market given not just the belief that you are buying on some lows, but there are some pretty strong fundamentals in your favor -- low inflation, improving productivity." said Sowerby, the analyst at Loomis, Sayles & Co.
Overseas, Japan's Nikkei stock average finished Monday down 2.4 percent. In Europe, France's CAC-40 surged 4.4 percent, Britain's FTSE 100 climbed 2.7 percent, and Germany's DAX index jumped 4.0 percent.