Stocks Hold Rally as Banks, Tech Surge

Stocks spiked higher Thursday as investors began to believe in a rally that sent the Dow industrials to their highest four-day winning streak in more than 75 years.

A long-awaited change in mark-to-market accounting rules spurred the rally, while a surge in factory orders also hoped stoke enthusiasm that Wall Street was winding its way out of a protracted bear market.

Though they closed well off their highs for the day, financials led the charge, while industrial, metals and material stocks also joined in.

"These rules were absolutely the single biggest factor causing the complete turmoil in the credit markets," said Chip Hanlon, president of Delta Global Advisors in Huntington Beach, Calif. "This changes everything."

The indexes did retreat some after testing important resistance levels, with the Dow Jones Industrial Average backing off 8,000 and the Standard & Poor's 500 recoiling from 840. The Nasdaq, though, turned positive for 2009 as its gains for the day at one point topped 4 percent.

Caterpillar led Dow gainers on a play that capitalizes both on a global infrastructure buildout and hopes that the housing market is making a bottom.

Bank stocks also did well, but the rally was about more than just the mark-to-market changes.

The accounting rule changes from the Financial Accounting Standards Board will give financials more leeway in how they value the toxic mortgage-backed assets on their books, a move seen as key to clearing up bank balance sheets.

In other major developments, the Group of 20 global economic summit yielded a trillion-dollar pledge to goose the International Monetary Fund, and President Obama's budget is nearing approval in Congress.

Bank of America shares were among the group's biggest gainers as the company seeks to sell asset manager Columbia Management and First Republic Bank, sources told the Wall Street Journal.

BofA shares also got a boost after CEO Ken Lewis said during a live interview on CNBC that the bank had a "huge" capital cushion, though it would take some time before it could pay back government bailout money.

The SPDR Financial exchange-traded fund reflected the move up in the sector.

Automakers also were up sharply after the major manufacturers all reported sharply lower sales numbers that nonetheless beat expectations. GMAC, the financing arm of General Motors, also said Wednesday that it would resume making loans to subprime borrowers in order to spur sales.

GM and Ford both had strong days.

On the Nasdaq, Wynn Resorts was among the big gainers as casino operators with properties in Macau saw better than expected sales numbers.

Also stronger was CNBC.com parent General Electric , which rose on anticipation of an announcement this morning that it is teaming up with Intel in the health care field.

The venture is expected to involved providing technology to the industry, sources told the Journal.

The move away from a safety bid hit Treasurys as well as gold, which fell below $900.

Gold stocks got pummeled, with Anglogold Ashanti losing in the 10 percent range and the SPDR Gold Trust exchange-traded fund reflecting the drop in the sector.

Market breadth was broadly positive with gainers beating losers 8 to 1, though the ratio was more than 12 to 1 at one point.

Volume accelerated somewhat over recent lackluster days, with nearly 1.2 billion shares changing hands on the New York Stock Exchange with an hour left of trading. There were 11 new highs against only 1 new low.

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