Bank and job reports send stocks surging

NEW YORK - As far as Wall Street is concerned, there is no bad news anymore.

At least for now, traders are seeing news about longtime trouble spots like banking and unemployment in a strictly positive light.

Surging bank stocks have lifted the Standard & Poor's 500 index 37.4 percent since early March, when the benchmark for many mutual funds and other investments skidded to a 12-year low. The index is still down 40.6 percent from its high in October 2007.

On paper, U.S. stocks have gained nearly $2.9 trillion in value since the rally started.

The latest fuel for the ascent came from news that job losses slowed in April and that big banks do not need as much capital as some investors had feared.

The Labor Department said employers cut 539,000 jobs last month - the fewest in six months and much fewer than analysts had expected.

Bank shares surged after the government released report cards on the nation's 19 largest financial institutions.

The dissipating worries sent the Dow charging higher by 164.80 points, or 2 percent, to 8,574.65. The Standard & Poor's 500 index rose 21.84, or 2.4 percent, to 929.23, and the Nasdaq composite index rose 22.76, or 1.3 percent, to 1,739.00.

For the week, the Dow is up 4.4 percent, trimming its losses for 2009 to only 2.3 percent. It was the eighth gain for the index in nine weeks. The S&P 500 index jumped 5.9 percent, while the Nasdaq composite index rose 1.2 percent after logging bigger gains in recent weeks than other indicators.

Bank stocks drove yesterday's advance.Citigroup Inc. rose 21 cents, or 5.5 percent, to $4.02, and Bank of America Corp. rose 66 cents, or 4.9 percent, to $14.17. Regional bank Fifth Third Bancorp soared $3.14, or 59 percent, to $8.49.

Though analysts believe many challenges remain, the market has demonstrated an ability to maintain its gains, putting in its best two-month performance in nearly 35 years.

Many market watchers are encouraged.

Liz Ann Sonders, chief investment strategist for the brokerage Charles Schwab & Co., said during the week that the recession might already have ended.

Even rising energy prices have been a good sign because traders are betting that an improving economy will require more resources.

Oil rose $1.92 to settle at $58.63 a barrel on the New York Mercantile Exchange yesterday, and gasoline futures closed at their highest levels since November.

That helped energy stocks. Chevron Corp. gained $2.40, or 3.5 percent, to $70.38, while Exxon Mobil Corp. rose $1.87, or 2.7 percent, to $70.80.

In other trading, the Russell 2000 index of smaller companies rose 18.88, or 3.8 percent, to 511.82 and is now up 2.5 percent for the year.