Stock market bounces back from last week’s slide over debt fears; Dow gains 149 points

Stocks recover from recent slide over debt fears

NEW YORK — A dose of good economic news has sent stocks sharply higher and erased the Dow Jones industrials’ big plunge of last week.

The news from the U.S. and Europe Wednesday has helped reassure investors that the global recovery is intact. The Commerce Department says exports rose in March to their highest levels since 2008.

Analysts say that the market’s drop and subsequent rebound reflects investors’ growing confidence that Europe’s debt problems are contained for now.

At the close, the Dow is up 149 at 10,897. The Standard & Poor’s 500 index is up 16 at 1,172. The Nasdaq composite index is up 50 at 2,425.

About six stocks rose for every one that fell on New York Stock Exchange. Volume totaled 1.3 billion shares compared with 1.5 billion Tuesday.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stocks bounced higher Wednesday after investors focused again on the improving U.S. economy.

The Dow Jones industrial average climbed about 135 points in late afternoon trading to return to where it was a week ago, before stocks tumbled on concerns about debt problems in Europe. The technology-dominated Nasdaq composite index led major indexes ahead of earnings from network gear maker Cisco Systems Inc.

Better economic news in the U.S. and Europe helped reassure investors that a global recovery is continuing. The Commerce Department said exports rose in March to their highest levels since 2008. That was a welcome signal for the manufacturing industry, which has been strengthening since last year. Increased demand could eventually lead to more hiring.

Most European markets posted big gains after better economic numbers signaled that a rebound is occurring in many parts of the continent. Stocks surged around the world Monday after European leaders agreed to a nearly $1 trillion bailout to contain fears of a debt crisis that pounded markets last week.

While stocks have stabilized, currency markets are still in flux. The euro edged higher against the dollar Wednesday but is still hovering near a 14-month low.

Uncertainty over the long-term health of the euro helped lift gold to a record high. Investors worry that the euro could still lose value as European countries try to work though debt problems by taking on more debt. Many countries also will have to slash spending. Investors have turned to gold as an alternative to holding currencies.

Gold jumped $25.50 to $1,245.80 an ounce. That lifted shares of gold producers Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp.

Max Bublitz, chief strategist at SCM Advisors in San Francisco, said the swings of the past few weeks spooked investors who had become overconfident. Now, the focus can return to the U.S. economy. Expectations of a recovery have driven the market higher since major stocks indexes hit 12-year lows in March last year. The market made steady gains from February-April before concerns about Greece briefly erased stocks’ gains for the year.

“We got a lot of the bullishness and complacency out of the market,” he said. “As long as we have doubters out there, then I’m a lot more comfortable saying the trend that’s been in place the last 14 months stays there.”

In the final hour of trading, the Dow rose 135.65, or 1.3 percent, to 10,883.91. The Standard & Poor’s 500 index rose 14.42, or 1.3 percent, to 1,170.21, while the Nasdaq rose 46.10, or 1.9 percent, to 2,432.41.

Bond prices fell, pushing yields higher. The yield on the benchmark 10-year note rose to 3.56 percent from 3.53 percent late Tuesday.

Crude oil fell 72 cents to $75.65 per barrel on the New York Mercantile Exchange after the International Energy Agency said global oil demand is expected to rise less than previously expected in 2010.

The Commerce Department said that the nation’s trade deficit rose to a 15-month high in March as higher oil prices pushed import costs higher. The report also showed exports rose 3.2 percent to their highest level since October 2008, a sign the economy continues to get stronger.

Cisco rose 83 cents, or 3.2 percent, to $26.79.

Morgan Stanley shares fell after The Wall Street Journal reported that the investment bank is facing an investigation into its dealings in mortgage securities. The stock fell 83 cents, or 2.9 percent, to $27.55.

A Morgan Stanley spokesman said the bank hasn’t been contacted by the Justice Department about the deals in question and that he isn’t aware of an investigation.

Freeport-McMoRan rose $2.11, or 3 percent, to $72.35, while Newmont Mining rose 79 cents, or 1.4 percent, to $58.99.

Four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 924 million shares, compared with 1.1 billion shares traded at the same point Tuesday.

The Russell 2000 index of smaller companies rose 19.26, or 2.8 percent, to 714.74.

Germany’s DAX index jumped 2.4 percent after a report showed its economy grew more than expected in the first quarter. Britain’s FTSE 100 climbed 0.9 percent and France’s CAC-40 gained 1.1 percent. Japan’s Nikkei stock average fell 0.2 percent.