U.S. Stocks Surge At Open

By KRISTINA PETERSON

NEW YORK—U.S. stocks surged as the market opened, and key indexes leapt back into the black for the year after the European Union agreed to a nearly $1 trillion package to help stabilize a debt crisis threatening to widen within Europe.

The Dow Jones Industrial Average climbed 404 points, or 3.9%, to 10784 in early trading, on pace for its biggest one-day gain of the year.

All of the Dow's 30 components gained, with General Electric leading the measure, up 7.9%. Bank of America surged 6.7% and Boeing climbed 6.9% after Goldman Sachs upgraded the stock to conviction buy from neutral, writing that Boeing "spans nearly every positive global theme that is driving outperformance in stocks today."

The Nasdaq climbed 4.8%, while the Standard & Poor's 500-stock index surged 4.4%, led by its financials and technology sectors as investors returned emphatically to the riskier areas of the market.

The U.S. market's surging open followed strong gains in the Asian and European markets after the European Union agreed to a €750 billion ($954.83 billion) bailout, including €440 billion of loans from euro-zone governments, €60 billion from a European Union emergency fund and €250 billion from the International Monetary Fund.

“ Great solution! Solve a debt problem with more debt. Makes me want to invest, . . . Not! ”

—Richard Jay Veenis

 

In further coordinated efforts to assuage deeply spooked markets, the European Central Bank will go into the secondary market to buy euro-zone national bonds—a step last week that its president, Jean-Claude Trichet, said the central bank didn't even contemplate—and the Federal Reserve, working with other central banks, re-activated swap lines so foreign institutions can get access to loans.

After falling to 14-month lows last week, the euro initially surged more than 2% to hover near $1.30l, while the dollar sank. The U.S. Dollar Index, which tracks the U.S. currency against a basket of six others, fell 1.1%.

Treasurys declined, with the 10-year note down to push yield up to 3.57%. Crude-oil futures jumped to climb above $77 a barrel, while gold futures declined.

In continuing efforts to decipher what caused Thursday's rapid plunge, the four main stock exchanges will be meeting with the Securities and Exchange Commission in Washington, before Congressional hearings Tuesday.

Before the market opened on Monday, the New York Stock Exchange invoked a rarely used rule allowing designated market-makers to not show prices before the bell, making it easier and faster to open stocks.
The rule was approved by the Securities and Exchange Commission on Dec. 6, 2007 and has been used rarely since then.

There is no specific threshold that triggers revoking the rule, said NYSE spokesman Ray Pellecchia. This morning's surge in futures prompted Monday's decision, he said.
"It's meant to ensure a prompt opening," he said.

Among stocks in focus, Tyson Foods jumped 4.8% in premarket trading after swinging to a fiscal second-quarter profit, handily topping analysts' estimates, as higher meat and poultry prices boosted sales amid a broad economic stabilization.

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