By Chuck Mikolajczak
NEW YORK (Reuters) - Stocks snapped back on Tuesday after General Electric
Financial stocks recovered a sizable chunk of Monday's record loss after the Federal Reserve extended several emergency measures integral to stabilizing banks during the credit crisis.
The Fed's move came a day after Fed Chairman Ben Bernanke emphasized that policy-makers were determined to stabilize the economy and financial markets.
The S&P financial index <.GSPF> rose nearly 8 percent, as Citigroup
But the spotlight was on conglomerate GE whose shares surged 13 percent after the maker of goods from jet engines to lightbulbs said it plans to scale back its sizable finance arm and cut jobs as the U.S. recession digs deeper.
"There's been concern about GE's defending its triple-A credit rating at its financing unit ... the company is taking steps to bolster that unit, which will help protect its dividend," said Brian Gendreau, an investment strategist in New York for ING Investment Management Americas. "This is helping to pull the market higher."
The Dow Jones industrial average <.DJI> gained 270.00 points, or 3.31 percent, at 8,419.09. The Standard & Poor's 500 Index <.SPX> rose 32.60 points, or 3.99 percent, at 848.81. The Nasdaq Composite Index <.IXIC> added 51.73 points, or 3.70 percent, at 1,449.80.
Energy stocks, currently the cheapest S&P sector in relation to earnings, also drove the Dow higher after losses on
Monday. Chevron
Stocks pared gains and the Dow briefly turned negative after General Motors
The carmaker recovered to end up almost 6 percent at $4.85, while Ford rose 6 percent to $2.70.
Executives of the big three U.S. automakers, including Chrysler, are due to present Washington with their plans to justify a $25 billion bailout as worries about possible bankruptcy persist.
As part of its plan, Ford said it expected its overall and North American automotive business to break even or be profitable in 2011 and did not anticipate a liquidity crisis, barring a bankruptcy of one of its domestic rivals.
Even with the broad gains, worries about the deepening economic slump fueled some caution, as diversified manufacturer 3M Co
downgrade.
Advancers outnumbered decliners by nearly 3 to 1 on the NYSE, while the ratio of advancers was more than 2 to 1 to decliners on the Nasdaq.
(Editing by Kenneth Barry)
