Stocks extended their sharp gains across the
board Wednesday after global central banks announced a coordinated plan
to support the global financial system, a handful of
better-than-expected economic news and as China said it would loosen
monetary policy by cutting banks' reserve requirements.
The Dow Jones Industrial Average briefly spiked more than 400 points, led by Caterpillar [CAT 96.24 5.70 (+6.3%) ] and Cisco [CSCO 18.68 1.00 (+5.66%) ], on track for its third consecutive gain.
The blue-chip index is back in positive territory for 2011.
The S&P 500 and the Nasdaq also jumped sharply. The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled to trade below 28.
All 10 S&P sectors were trading sharply higher, led by energy and materials.
The world's major central banks including the
ECB, Federal Reserve, Bank of England and the central banks of Canada,
Japan and Switzerland agreed to coordinated action
to ease the increasing strains on the global financial system.
The move is designed to "enhance their capacity to provide liquidity support to the global financial system."
markets rallied with the news, but if you stop and think about it, you
have to realize what kind of danger the world is in for all the central
banks to get together and save Europe,” said Alan Valdes, director of
floor operations and VP of trading at DME Securities. “It makes you
wonder what will happen in two or three days...the market moves so
quickly with the news.”