10 Apr 2009

Wall Street stocks jump on bank profit outlook

3:03 pm on 10 April 2009

US stocks surged on Thursday, capping their fifth weekly gain, after banking giant Wells Fargo projected a record first-quarter profit.

An hour before trading began, Wells Fargo said it expected a "record" net income of some $US3 billion for the first quarter.

The projection widely topped market expectations, thanks in part to a better-than-expected performance by its newly acquired bank, Wachovia.

The Dow Jones Industrial Average shot up 246.11 points, or 3.14%, to finish at 8,083.22, breaching the psychological 8,000 level.

The tech-heavy Nasdaq composite leapt 61.88 points, or 3.89%, to 1,652.54 and the broad-market Standard & Poor's 500 index advanced 31.40 points, or 3.81% to 856.56.

Fresh economic data released on Thursday also provided some market relief.

The US trade deficit fell more than expected in February to a nine-year low as a prolonged recession sliced imports, the Commerce Department said.

The deficit dropped for the seventh consecutive month, dropping by 28.3% to $US26 billion from a revised $US36.2 billion in January.

In addition, the government said on Thursday that new jobless claims fell more than expected by 3% last week but still remained at a 26-year high amid the recession.

The Labor Department said initial claims for unemployment benefits fell to a seasonally adjusted 654,000 in the week ending 4 April.