NEW YORK (CNNfn) - Wall Street enjoyed a strong rally Wednesday and the Dow industrials soared nearly 100 points to their best close in three weeks as investors rejoiced amid hopes that Japan may get a grip on its ailing economy.
Southeast Asian stock markets soared and the value of the yen climbed after a report in a widely circulated Japanese newspaper overnight that Tokyo is considering introducing permanent tax cuts even before a July 12 election. Gains in the region were also supported by the expected announcement Thursday of a "bridge bank" -- a U.S. style institution that would help failing Japanese banks deal with their bad loans.
Wall Street's advances were underpinned by news the Federal Reserve left interest rates unchanged after ending a two-day policy meeting, a decision that had been widely anticipated. A lower-than-expected reading of the National Association of Purchasing Management's June index also added to the bullish mood.
The Dow Jones industrial average rallied 96.65 points, or 1.08 percent, to close at 9,048.67, its first close above 9,000 since June 9. Gainers trounced declines 2,092 to 932 on trading volume of 688 million shares on the New York Stock Exchange.
Chris Grisanti, director of research at Spears, Benzak, Salomon & Farrell, said Wall Street is poised for more near-term gains. (106K WAV) or (106K AIFF)
The Nasdaq Composite rose 19.72, or 1.04 percent, to 1,914.46 and the broad S&P 500 index gained 14.72, or 1.3 percent, to 1,148.56, a new record high. (Look here for the performance of widely held stocks.)
The bond market closed mixed after the friendly NAPM report and the Fed's neutral decision were weighed against the weakening dollar. The yield on the benchmark 30-year Treasury bond stood at 5.62 percent as its price fell 1/32 of a point.
The dollar slipped against the yen as optimism swept Asian markets. But the greenback advanced against the German mark as Russian financial markets remained a mess and put a pressure on the German currency.
The bulls are back
In stocks, a feeling that the best of all worlds is back again -- with strong, non-inflationary U.S. growth, stable interest rates at home and a bit of light at the end of the Asian economic tunnel -- gave buyers reasons to celebrate.
Internet stocks were among the market's leaders with shares of @Home (ATHM) surging 6-3/16, or more than 13 percent, to 53-1/2 after the company announced 10 new distribution agreements with North American and international cable operators. Another Internet service provider, Earthlink Network (ELNK), soared 10-1/4, or more than 13 percent, to 87 after announcing a 2-for-1 stock split. Search engine Yahoo! (YHOO) gained 12-3/8 to 169-7/8 and Infoseek (SEEK) was up 1-15/16 to 37-13/16.
Internet advertiser DoubleClick (DCLK) soared 14-5/16, or almost 29 percent, to 64 after announcing it had the third-largest Internet advertising audience reach in April, after America Online (AOL) and Yahoo! And Netscape (NSCP) jumped 8-5/8, or almost 32 percent, to 35-11/16 amid reports it is negotiating with media companies to increase the competitiveness of its Website.
Big-name technology issues also advanced, as Dell (DELL) rose 1-1/8 to 93-15/16, Intel (INTC) gained 1-1/16 to 75-3/16, and Microsoft (MSFT) climbed 1 to 75-3/16, even after news of a delay in a major upgrade of its Windows NT operating system.
Dow member IBM (IBM) rose 2 to 116-13/16. Another Dow component, Disney (DIS), which was largely responsible for the blue chip index's losses Tuesday, bounced back 1-3/16 to 106-1/4.
In the day's deals, shares of Firstar Corp. (FSR) soared 8-3/16, or more than 21 percent, to 46-3/8 after the company sealed an expected merger deal with rival Star Banc Corp. (STB).
The number of the day's losers was small, but their losses were enormous. Leading the pack, shares of Advanced Fibre (AFCI) plummeted 20-15/16, or more than 52 percent, to 19-1/8 after the maker of telecommunications systems said second-quarter earnings will fall sharply below expectations and the firm's chief executive quit. Several Wall Street analysts downgraded the stock.
Medirisk (MDMD) tumbled 13-15/16, or almost 69 percent, to 6-5/16. Late Thursday the company, which sells access to its healthcare databases and software that analyzes them, warned its second-quarter earnings and revenues won't meet expectations. Separately, Medirisk said Wednesday it had bought Sweetwater Health Enterprises for $6.2 million. 
-- by staff writer Malina Poshtova Zang
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