Stocks surge on Fed move
Wall Street cheers news that the central bank is pumping an additional $200 billion into the banking system.
NEW YORK (CNNMoney.com) -- Stocks surged Tuesday morning after the Federal Reserve said it would loan up to $200 billion to banks and lenders in an effort to loosen up tight credit markets.
The Dow Jones industrial average (INDU) soared more than 250 points in the early going. The blue-chip index had ended the previous session at a 17-month low.
The broader Standard & Poor's 500 (SPX) index climbed 2.2%. after ending the previous session at a 19-month low. The Nasdaq composite (COMP) jumped 2.3% after ending the previous session at its lowest level in 18 months.
Gains were broad based, with all 30 Dow stocks rising. Financial components JP Morgan (JPM, Fortune 500), Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), American Express (AXP, Fortune 500) and AIG (AIG, Fortune 500) led the advance.
Stocks tumbled Monday for a third straight session on worries that the financial sector will see more writedowns related to the housing and credit crises. Those concerns remained Tuesday, but were countered by the Fed's plan to keep liquidity flowing in financial markets.
The Fed will make up to $200 billion available to cash-strapped banks and lenders. The loans will be available for a term of 28 days, rather than overnight. The program is being coordinated with central banks worldwide. (Full story)
Investors, cheered by the injection of liquidity into the system, shook off a jump in energy prices. Oil prices surged to a new record trading high of $109.70 a barrel while gas prices hit $3.227 a gallon at the pump, matching the all-time record from last May.
Economic news. The trade gap widened in January, the government reported, but the spread between the nation's imports and exports was smaller than what Wall Street economists had forecast.
The economy will see slower growth this year, as the fallout from the housing market continues to hit consumer spending and job growth, but a recession is avoidable, according to the quarterly forecast from the University of California at Los Angeles.
Company news. Google (GOOG, Fortune 500)'s $3.1 billion bid for online ad tracker DoubleClick got the OK from European Union regulators, who said that the deal won't hurt competition for online ads.
Texas Instruments (TXN, Fortune 500) warned late Monday that first-quarter sales and earnings won't meet forecasts. Shares lost 2%.
Other markets. U.S. light crude oil for April delivery rose 10 cents to $108 a barrel on the New York Mercantile Exchange. The front-month contract ended the previous session at a record closing high of $107.90.
COMEX gold for April delivery soared $6.40 to $978.20 an ounce.
In currency trading, the dollar touched a fresh record low against the euro and fell versus the yen.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.57% from 3.45% late Monday as investors took profits. Bond prices and yields move in opposite directions. 
-
Not even ultra-dapper President Obama could help Hartmarx, the Chicago-
based clothing maker. More -
The company has gone to the chickens despite producing 42 million dozen table eggs per year. More -
This Bay-area town sought assistance after plunging property tax revenue left coffers empty. More -
The bloom is off this celebrity florist as corporate budgets for flower arrangements disappear. More -
Isn't it ironic that a company with a mission to help others avoid bankruptcy was unable to help itself? More
