Question – Is the worst over? Has the economy finally bottomed out and is prosperity just around the corner?
NEW YORK (AP) — Stocks surged Thursday to their highest levels in two months after banking giant Wells Fargo & Co. surprised the market with an early profit report that blew past analysts’ expectations thanks to a strong increase in its lending business.
The Dow Jones industrial average jumped nearly 250 points and major market indexes logged their fifth straight week of gains. Markets are closed for Good Friday.
Investors have been grasping at any sign of improvement in the crippled banking industry, and Wells Fargo’s report Thursday that it expects first-quarter earnings of $3 billion provided an encouraging sign that a deep freeze in borrowing activity may finally be thawing. Wells Fargo said it benefited from its January acquisition of Wachovia and an increase in mortgage applications.
“The fact that Wells Fargo can have record profits despite the troubles facing the banking system tells you something,” said Rick Campagna, chief investment officer at 300 North Capital in Pasadena, Calif. “It’s very good news.”
The Dow and the Standard & Poor’s 500 index ended at their highest levels since Feb. 9 and the Nasdaq posted its highest finish of the year, giving it a gain of 4.8 percent for 2009.
The Dow rose 246.27, or 3.1 percent, on Thursday to 8,083.38.