NEW YORK - Stocks shot higher today, led by banking and technology shares, as a sharp rebound on the battered Tokyo Stock Exchange spurred a rally in key markets around the world. Dow up 125.74 after Asia rally
The Dow Jones industrial average rose 125.74 points to close at 7,698.22, less than 20 points shy of where it stood just before its 554-point plunge three weeks ago. Earlier in the session, the Dow rose by as much as 166 points, nearly doubling its 170-point gain over the prior two session.
Advancers beat decliners by a 3-to-1 margin on the New York Stock Exchange today, with 2,276 up, 704 down and 481 unchanged. NYSE volume eased from Friday's hectic pace, but was still busy with 575.95 million shares traded.
Broader stock indicators also rallied after the main stock index in Tokyo surged 8 percent amid optimism that the Japanese government will take aggressive steps to aid its floundering economy.
Investors were also heartened by cooling tensions in the latest U.S.-Iraqi standoff and another strong day in the bond market, where interest rates eased to their lowest level in nearly two years amid new signs suggesting inflation can remain tame.
The Standard & Poor's 500-stock index rose 17.85 to 946.20, and the NYSE composite index climbed 8.82 to 494.88. The technology-heavy Nasdaq index rose 30.59 to 1,614.10, giving it a three-session rebound of nearly 5 percent.
The Russell 2000 index of smaller companies gained 7.24 to 435.65, and the small-company dominated American Stock Exchange composite index rose 6.38 to 679.00.
Meanwhile, the price of the Treasury's main 30-year bond was down 5/8 point, or $6.25 per $1,000 in face value, by late afternoon, while its yield fell to 6.07 percent, from 6.10 percent Friday.
Financial stocks, hammered last week amid worries about their substantial loan portfolios in Asia and Latin America, led today's advance. The technology sector was rebounding for the third straight session after being dragged lower over concerns about the group's considerable Asian dealings.