Stocks jumped Wednesday, chalking up their strongest day of 2012, as signs of moves in Europe to rescue Spain’s troubled banks sparked a rebound from recent selling.
The Dow Jones industrial average closed with a gain of 287 points. The broader S&P 500 and the technology-focused Nasdaq composite index also rallied strongly.
The market was ripe for a rebound after the broader market dropped more than 6 percent in May, analysts said.
A gloomy jobs report and signs of a global economic slowdown hammered Wall Street Friday, wiping out the stock market’s gains for 2012. However, Wednesday’s advance lifted stocks back into positive territory for 2012.
“The evidence was there that the market was at least getting close to the point of seller exhaustion. Once that happens, the pressure to cover short positions increases,” said Chris Burba, a short-term market technician at Standard & Poor’s in New York, who noted that volume levels also increased on Friday.
Increasing optimism that central bankers will move to boost the economy and signs of urgent moves in Europe also lifted stocks.
European sources said German and European Union officials sought solutions for Spain’s weakened banks, the latest worry in the fiscally troubled euro zone, although Madrid has not yet requested assistance and is resisting political conditions.
Adding to the slightly more upbeat news on the economy, the Federal Reserve said in its Beige Book summary that U.S. economic growth picked up over the two prior months and hiring showed signs of a modest increase.
Underscoring the difficulty in tackling the euro zone crisis, European Central Bank President Mario Draghi suggested further stimulus to tackle the euro zone’s debt crisis would not necessarily be forthcoming. The ECB left interest rates unchanged following its meeting Wednesday.
The S&P 500 remains up 4 percent for the year so far, but is well off its highs of 2012.
Read more of this story on MSNBC.com