Aug. 9, 2011 (Bloomberg) -- U.S. stocks rose, capping the biggest rally in more than two years for benchmark indexes, as the Federal Reserve said it was prepared to use a range of tools to bolster the economy following yesterday’s rout in equities.
The Standard & Poor’s 500 Index swung between gains and losses following the Fed’s statement and closed near the highest level of the trading day. Financial stocks in the S&P 500, which paced a slide that erased $1 trillion in market value yesterday, rallied 8.2 percent. Bank of America Corp. (BAC) and Citigroup Inc. (C) jumped at least 13 percent. Freeport-McMoRan Copper & Gold Inc. (FCX) gained 7.5 percent as gold advanced to a record.
The S&P 500 jumped 4.7 percent to 1,172.53 at 4 p.m. in New York, after falling as much as 1.6 percent. The Dow Jones Industrial Averagerose 429.92 points, or 4 percent, to 11,239.77 today. Both gauges had the biggest gain since March 23, 2009. About 16.8 billion shares changed hands at 4:56 p.m., more than twice the three-month average, Bloomberg data show.
“The Fed is on top of the game,” Michael Holland, chairman and founder of New York-based Holland & Co., said in a telephone interview. His firm oversees more than $4 billion. “For people who are serious about the business and about the economy, I believe that the Fed fulfilled what they wanted to hear. It’s premature to say that they are prepared for an imminent stimulus, but it’s not early to say that they are becoming more likely to do something of significance.”
READ MORE: Bloomberg