Stocks surge; S&P 500 turns positive
NEW YORK Another big rally on Wall Street has erased the losses suffered by the Standard & Poor’s 500 index this year.The S&P 500, the market barometer preferred by professional investors, is now up 0.4 percent for 2009. Many investments like mutual funds either mirror or are measured against the index.Gains in housing, financial and materials stocks pushed the S&P up 3.4 percent Monday. The Dow Jones industrial average jumped 214 points but is still down 4 percent for the year.Two new economic nuggets bolstered the case that the economy’s slide could be slowing and helped extend a two-month rally. Pending U.S. home sales increased more than expected to post their second straight monthly gain, while construction spending rose unexpectedly in March after five straight decreases.David Kelly, chief market strategist at JPMorgan Funds, said each piece of better-than-expected economic news is easing worries that the recession would worsen.”It’s like watching the market’s blood pressure come down,” he said. “Every day that goes by without something bad happening is reducing the risk of an economic rebound getting derailed.”According to preliminary calculations, the S&P 500 index rose 29.72, or 3.4 percent, to 907.24, its first close above 900 since Jan. 8.The Dow rose 214.33, or 2.6 percent, to 8,426.74. The blue chips hadn’t closed above the 8,400 level since Jan. 13.The Nasdaq composite index rose 44.36, or 2.6 percent, to 1,753.56. It is up 11.8 percent in 2009.The rally came after the National Association of Realtors said its index of pending sales for previously occupied homes rose 3.2 percent to 84.6. That was well ahead of the 82.1 economists had been expecting and the second month of gains after the index hit a record low in January.Separately, the Commerce Department said construction spending rose 0.3 percent, the best showing since a similar increase last September. Economists surveyed by Thomson Reuters had expected spending to drop 1.5 percent.