Aug. 16-- U.S. stocks rose after a late-day rally in banks and brokerages helped the Dow Jones Industrial Average erase a 343-point drop.
Bear Stearns Cos., the second-largest U.S. underwriter of mortgage bonds, climbed the most since 2001 after Punk Ziegel & Co. analyst Richard Bove said the firm may sell a stake of as much as 20 percent. Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. led financial shares to the biggest gain in a week as expectations grew that the Federal Reserve will cut interest rates.
The Standard & Poor's 500 Index rose 7.6, or 0.5 percent, to 1,414.3 at 3:59 p.m. in New York after earlier dropping 2.6 percent. The Dow average increased 7.07, or 0.1 percent, to 12,868.54. The Nasdaq Composite Index slipped 8.06, or 0.3 percent, to 2,450.77.
Financial shares in the S&P 500 climbed 3.8 percent after earlier dropping 1.5 percent.
``There's a rumor of an emergency Fed meeting,'' said Thomas Garcia, head of trading at Thornburg Investment Management, which oversees about $45 billion in Santa Fe, New Mexico. ``You've got a major credit crunch right now and these guys need to get it together and do something about it.''
No meeting is scheduled for the rate-setting Federal Open Market Committee today, according to the Fed's Web site. Any unscheduled meetings of the FOMC would be ``confidential,'' St. Louis Fed President William Poole said yesterday.
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