Stocks rally, bonds soar in relief after UK calms markets
Source: AP
By DAMIAN J. TROISE and STAN CHOE
NEW YORK (AP) — Stocks rallied on Wall Street to their first gain in more than a week, as some calm returned to markets around the world Wednesday after the Bank of England moved forcefully to get a budding financial crisis there under control.
The S&P 500 jumped 2% for its best day in seven weeks to snap its longest losing streak since the coronavirus crash in February 2020. Besides the relief on Wall Street, bond markets around the world also relaxed and European stocks erased morning losses after the U.K. central bank said it would buy however many U.K. government bonds are needed to restore order to its financial markets.
The drop in bond yields eased some of the pressure that’s been choking Wall Street this year, and the Dow Jones Industrial Average rallied 1.9%. The Nasdaq composite climbed 2.1%, and the smaller stocks that make up the Russell 2000 index soared even more, 3.2%.
The moves helped markets recover recent losses triggered by turmoil in U.K. financial markets. After the government there announced a sweeping set of tax cuts, investors worried the attempts to goose the U.K. economy could push already high inflation even higher. That caused the value of the British pound to plunge and bond yields globally to jump.
FILE - A trader looks over his cell phone outside the New York Stock Exchange, Wednesday, Sept. 14, 2022, in the financial district of Manhattan in New York. (AP Photo/Mary Altaffer, File)
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