Stocks record biggest gains of year; Dow up 218

Tuesday, March 13, 2012

NEW YORK (AP) — Bank stocks turbocharged a rally across the financial markets Tuesday, and all three major stock indexes posted their biggest gains of the year. The Dow Jones industrial average rose 218 points and closed at its highest level since the end of 2007.

The Nasdaq composite closed above 3,000 for the first time since December 2000, during the collapse in dot-com stocks.

The market rallied from the opening bell Tuesday after the government said February retail sales gains were the strongest since September. Americans spent more on cars, clothes and appliances.

The rally gained strength in the afternoon when the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling. The Fed also said strains in the global financial markets have eased.

Then JPMorgan Chase, the country’s largest bank by assets, announced that it plans to buy back as much as $15 billion of its stock and raise its quarterly dividend to 30 cents per share from 25 cents a share.

“That’s what really made the day,” said Jeffrey Kleintop, chief market strategist a LPL Financial.

The announcement came just before the Fed made a surprise announcement of the results of its annual stress test for banks. JPMorgan Chase and 14 other financial institutions passed. Four, including Citigroup, failed.

The Fed had planned to release the results on Thursday afternoon. But it moved up the announcement after JPMorgan declared its dividend increase. The bank said it had the Fed’s blessing to raise the dividend.

JPMorgan Chase stock gained 7 percent, and other banks followed. Citigroup and Goldman Sachs gained 6 percent. Banks were easily the best-performing stocks in the market, gaining almost 4 percent as a group.

Citigroup stock was down 4 percent in after-hours trading following the Fed announcement.

The Dow finished at 13,177.68, its highest close since Dec. 31, 2007. The close put the Dow within 1,000 points of its all-time record, 14,164.53, set less than three months earlier, Oct. 9, 2007.

The Nasdaq composite index rose 56.22 points, or 1.9 percent, to 3,039.88.

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JCLifer 1 year, 2 months ago

Bankers are doing great raking in all that money after the federal bailouts. Too bad the citizens are not doing so well. The real unemployment rate remains around 15% and the underemployment rate is probably at least 30%,

Homeowners lost over 30% of their equity.

CEOs will get their big bonuses this year.

The worker will get the shaft and a high health insurance premium since Obamacare is mandating that health insurance cover everything and everybody.

Yeah, things are going great in this country, depending on who you are.

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