U.S. News

US STOCKS-Wall St flies on "shock and awe" rescue plan


By Edward Krudy NEW YORK, May 10 (Reuters) - U.S. stocks surged on Monday as an agreement on a $1 trillion emergency rescue package from the EU quelled fears that a new credit crisis would derail European economies. The "shock and awe" bailout fund agreed by European leaders in the early hours of Monday drove the S&P 500 to its highest opening jump on record as indexes rushed back into positive territory for the year after last week's sharp slide. Banks ranked among the top beneficiaries as the rescue deal reduced fears of a possible default. The S&P Financial index climbed 4.4 percent and was one of the top percentage gainers among S&P sectors. Bank of America Corp jumped 5.4 percent to $17.06. The package of standby funds and loan guarantees available to euro-zone governments shut out of credit markets is on the scale of the U.S. government's $700 billion Troubled Asset Relief Program in 2008 designed to stave off the credit crisis and calm swooning markets. For details, see "Going into the weekend, there were doubts that the EU would step up to the plate and I think the almost $1 trillion package is impressive in terms of the dollar size and the fact that members of the EU finally acted at a time when they were needed," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. Some analysts cautioned, however, that longer-term concerns remained over whether euro-zone nations saddled with high debt loads would be able to manage their balance sheets. The Dow Jones industrial average gained 349.54 points, or 3.37 percent, to 10,729.97. The Standard & Poor's 500 Index rose 41.33 points, or 3.72 percent, to 1,152.21. The Nasdaq Composite Index added 92.40 points, or 4.08 percent, to 2,358.06. Howard Silverblatt, an analyst at Standard & Poor's, said that based on records dating back to the late 1960s, the S&P 500's percentage and point gains at the opening were both records. The broad-based index jumped 52.97 points at the open -- a gain of 4.8 percent. The Dow's surge is the biggest intraday move since March 2009, according to Dow Jones Indexes. Although advancing stocks on the New York Stock Exchange outnumbered decliners by nearly 20 to 1, volume was only moderate compared with the massive volumes traded during the sell-off on Thursday and Friday. The CBOE VIX volatility index, known as Wall Street's fear gauge, fell 26.2 percent to 30.23 after leaping to its highest level in more than a year on Friday. In another bullish sign, 88 percent of stocks in the S&P 500 remained in a long-term uptrend as of Friday, with their 50-day moving average above their 200-day moving average, according to Concept Capital, a New York-based brokerage. Boeing Co provided the biggest boost to the Dow, climbing 6.2 percent to $70.87 after Goldman Sachs raised its rating on the stock to "buy" from "neutral." McDonald's Corp increased 3.8 percent to $70.61 after posting a rise in its April same-store sales. Suntech Power Holdings Co Ltd shot up 10.3 percent to $11.57 after saying first-quarter revenue would beat Wall Street expectations. On the downside, Dean Foods Co dropped 27 percent to $10.72 after posting first-quarter earnings that missed estimates and withdrew its full-year profit outlook. (Reporting by Edward Krudy; Editing by Jan Paschal) ((edward.krudy@thomsonreuters.com; Tel: +1 646-223-6314; Reuters Messaging: edward.krudy@reuters.com@reuters.net) (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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