U.S. stocks rally on Fed report
NEW YORK — US stocks jumped on Wednesday after a German court ruling helped clear the way for a eurozone bailout plan and the Federal Reserve said the US economy was still growing slowly.
The Dow Jones Industrial Average rose 275.56 points (2.47 percent) to close at 11,414.86, in a healthy rebound after three consecutive trading days of triple-digit losses.
The broader S&P 500 surged 33.38 points (2.86 percent) to 1,198.62, while the tech-heavy Nasdaq Composite rallied 75.11 points (3.04 percent) to 2,548.94.
US and European markets rebounded after Germany’s Constitutional Court ruled that Germany could participate in a eurozone-wide bailout mechanism, removing an obstacle to rescues of Greece and other struggling countries.
The gains continued after the Federal Reserve reported that the US economy has continued to grow slowly, offering a slightly better assessment of the US economy than the grim picture depicted by other recent indicators.
Stocks have fallen sharply in recent days amid fears of the eurozone’s debt crisis and the possibility of a double-dip recession in the United States, leading some analysts to say that the market was due for a bounce.
“We had three straight days of losses, and got oversold on the short term,” said Scott Marcouiller, chief technical market strategist for Wells Fargo Advisors.
But he warned: “There are still a lot of worries about global growth and fears of a recession and uncertainty surrounding Europe and the debt problems.”