By AP Business Writers Madlen Read And Sara Lepro, Ap Business Writers
NEW YORK – Wall Street has ended a tumultuous March on a high note, managing its first winning month this year and its best monthly performance in nearly seven years. Stocks finished off their earlier highs on Tuesday but resumed a three-week rally that has brought the Dow Jones industrials up a total of 16 percent since hitting their lowest level in 12 years on March 9.
The Dow rose 7.7 percent overall in March, its biggest monthly gain since October 2002.
Technology and financial shares led the rally as large investors loaded up on rising stocks in order to report strong holdings at the end of the first quarter, which ended on Tuesday.
Investors shrugged off lackluster economic data and snatched up some of the biggest names in technology and banking including Google Inc., International Business Machines Corp., Bank of America Corp. and Citigroup Inc.
The market is coming off a two-day pullback as stocks took a breather from a recent surge driven by optimism that U.S. banks may be emerging from the worst of a lending crisis.
The government finally delivered details last week of its plans to take failed loans off the books of struggling banks and leaders of several large banks have said they did well in January and February.
The financial sector is likely to get another dose of good news later this week. The Financial Accounting Standards Board is widely expected to ease accounting rules that require companies to list their assets at current market values.
Banks have had to take massive writedowns over the past two years as the value of mortgage-backed securities and other investments has withered. Banks say a softening of the “mark-to-market” rules would help their bottom lines.
Keith Wirtz, president and chief investment officer at Fifth Third Asset Management in Cincinnati, said the gain in bank stocks on Tuesday was likely boosted by some short-covering in anticipation of a resolution on the rules, as traders don’t want to miss out on a possible rally in financials later this week. Short covering, or the buying of stocks to cover bets that stocks would fall, has played a large role in the surge in bank stocks over the past few weeks.
According to preliminary calculations, the Dow Jones industrial average rose 86.90, or 1.2 percent, to 7,608.92, after earlier rising as much as 203 points. The Standard & Poor’s 500 index gained 10.34, or 1.3 percent, to 797.87, while the technology-heavy Nasdaq composite index rose 26.79, or 1.8 percent, to 1,528.59.
