Banks boost rally across Wall Street

THE US stock market posted its best day this year, with yesterday’s late spark coming from JPMorgan Chase & Co after the bank announced it will raise its dividend.

Stocks gained throughout the session, helped by stronger-than-expected retail sales and benign comments from the US Federal Reserve, which said recent strains on financial markets were easing.

The Dow Jones industrial average shot up 217.97 points, or 1.68 per cent, to 13,177.68 at the close. The Standard & Poor’s 500 Index rose 24.87 points, or 1.81 per cent, to 1,395.96. The Nasdaq Composite Index climbed 56.22 points, or 1.88 per cent, to 3,039.88.

The S&P 500 closed at a level not seen since June 2008 in a sign that the market foresees more strength in the US economy in coming months. The index, already up 11 per cent this year, has risen for five straight days and appears set for more gains.

Banks led the way with a powerful kick into the close. JP Morgan Chase & Co surged seven per cent to $43.39 and was the Dow’s top gainer after announcing it will raise its dividend and unveiling a $15bn stock-buyback program. Bank of America gained 6.3 per cent to $8.49 while an S&P index of financial stocks climbed 3.9 per cent.

“That kind of put us into fourth gear here,” said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston. “The financials have been such a drag on the whole market for the last couple of years.”

The Nasdaq Composite hit an intraday high at 3,039.89, its highest mark since November 2000.

Yesterday marked the first time that the Nasdaq closed above 3,000 and the Dow ended above 13,000 on the same day.

The S&P 500’s move above 1,390 puts the broad-market index in position to surpass 1,400, which could bring out more buyers. The S&P 500 index reached 1,396.13, its highest intraday level since June 2008.

Data in the United States once again indicated a slowly improving domestic economy, as retail sales recorded their largest gain in five months in February despite rising gasoline prices.

Volume was light, with about 7.38bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84bn.