Stocks made up most of Tuesday’s steep losses Wednesday on hopes that the Federal Reserve will cut interest rates when it meets next month.
A letter from Fed Chairman Ben Bernanke to Democratic Senator Charles Schumer of New York said the Fed is “prepared to act as needed” to keep the credit market crisis from spreading, and he also urged government action to stem the meltdown in the subprime mortgage market.
The result was 2% gains in the major stock indexes, with the Nasdaq up 2.5%, with Intel , Apple
and Research in Motion
among the biggest winners.
Nokia soared 7% after announcing an online music service, and Seagate
gained 4% after raising guidance.
Semtech jumped 10% on its results, and Compuware
rose 6% on a share buyback.
Sourceforge lost 24% on a downgrade.
The Nasdaq soared 62 to 2562, the S&P 500 rose 31 to 1463, and the Dow surged 247 to 13,289. Volume declined to 2.82 billion shares on the NYSE, but rose to 1.7 billion on the Nasdaq. Advancing issues led by a 28-4 margin on the NYSE, and 23-7 on the Nasdaq. Upside volume was 95% on the NYSE, and 90% on the Nasdaq. New highs-new lows were 21-85 on the NYSE, and 44-85 on the Nasdaq.