Dow jumps 163, recovers all of Monday's loss

Updated: 9:41 p.m. ET

The relief rally many people expected -- but didn't get -- on Monday arrived today. It's not clear if the rally can continue on Wednesday.

The Dow Jones industrials ($INDU) made back all of their 143-point loss on Monday. The Standard & Poor's 500 Index ($INX) and the Nasdaq Composite Index ($COMPX) recovered most of their Monday losses in rebounds built on chatter that central banks around the world will make more moves to stimulate the global economy.

The rally pushed gold (-GC) and crude oil (-CL) prices higher in New York. The dollar moved lower against major currencies, which almost always helps stocks. And Apple (AAPL), off as much as $4.47 in early trading, rebounded to $576.16, up $4.99. The gain boosted technology stocks.

Also giving the market some cheer: more talk of a European banking union to stabilize banks in Spain, Italy, Greece and elsewhere. Germany has started to say it won't agree to any banking union without a fiscal union.  "Whoever is footing the bill must also have a right of control, particularly when it comes to the large sums that are seen in banking crises," Bundesbank vice president Sabine Lautenschlaeger said in a speech today.

The Dow closed up 163 points to 12,574. The Standard & Poor's 500 Index ($INX) gained 15 points to 1,324, and the Nasdaq Composite Index ($COMPX) jumped 33 points to 2,843.

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The Nasdaq-100 Index ($NDX), heavily influenced by Apple, rose 29 points to 2,546.

The S&P 500's gain recovered 91% of its Monday loss; the Nasdaq's gain was more than two-thirds of Monday's loss.

After the close, computer-maker Dell (DELL) shares rose 2.5% to $12.27 after the company announced it plans to pay a quarterly dividend of 8 cents a share starting in the fiscal third quarter. That would translate into a dividend yield of 2.7%, based on today's close of $11.97.

How much the dividend will help the stock is a question. It's down 18.2% this year.

Wednesday brings a Commerce Department report on May retail sales and the Labor Department's May report on product-price inflation.

France, Germany and Italy will issue their consumer price index reports for May. The European Union will report on industrial production in the euro zone.

Futures trading suggests U.S. markets will open lower in large part because of worries about Greece and Italy.

More stimulus coming?
The speculation that central banks will do more to stimulate the global economy came after Fitch Investors downgraded 18 Spanish banks today.

At the same time, Charles Evans, president of the Federal Reserve Bank of Chicago, said he would support measures to generate faster job growth, underscoring his preference for more stimulus.

Evans has consistently called for more efforts by the Fed, but there's been a deep divide among Fed officials on the question. Several regional bank presidents want to start raising rates, fearing inflationary pressures are building.

The Fed's rate-making body, the Federal Open Market Committee, meets next week, with a rate announcement due on June 20. Evans isn't a member of the committee this year but is widely respected.

A big question is why the market rebounded as strongly as it did after Monday's drubbing. One reason, The Wall Street Journal suggested, was computerized trading that ignores fundamentals but looks for pricing opportunities.

Also, there wasn't any bad news, and the market apparently found some sort of a bottom a week ago when the Dow, S&P 500 and Nasdaq dropped below their 200-day moving averages and quickly recovered, the Journal noted.

Plus, relative strength indexes for the the trio had dropped below 30 as the month turned. Those are signals a market or security is oversold.

Crude oil and gold mostly move higher
Crude oil in New York rose 62 cents to $83.32 a barrel. Brent crude, however, was off 75 cents to $97.25 a barrel.

The retail price of gasoline was flat at $3.542 a gallon, according to AAA's Daily Fuel Gauge report.

Gold settled up $17 to $1,613.80 an ounce but has been falling back in electronic trading. Silver (-SI) added 33.3 cents to $28.95 an ounce. Copper (-HG) was off slightly to $3.3355 a pound. (An earlier version of the post incorrectly stated gold's settlement price.)

Interest rates were higher, with the 10-year Treasury yield rising to 1.651% from 1.6% on Monday. The dollar was down slightly against major currencies.

Energy prices -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Crude oil (-CL)			$83.32			$82.70			-3.71%			-15.69%
(per barrel)
Heating oil (-HO)			$2.6215			$2.6357			-3.02%			-10.04%
(per gallon)
Natural gas (-NG)			$2.2320			$2.2180			-7.84%			-25.33%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.6502			$2.6566			-2.66%			-0.27%
(per gallon)
Brent crude			$97.14			$98.00			-4.64%			-9.54%
(per barrel)
Retail gasoline			$3.5420			$3.5400			-2.15%			8.12%
(per gallon; AAA)

Industrials and energy sectors lead the market
Industrial stocks were the market leaders, followed by materials and financial stocks. All 10 sectors of the S&P 500 were higher. The laggard was utilities, up just 0.1%.

The Dow Jones Utility Average ($UTIL) was up 1.18 to 478. The Dow Jones Transportation Average ($DJT), closely watched as a leading economic indicator, rose 43 points to 5,035.

Boeing (BA) was the Dow leader, up $2.47 to $72.58, after analysts at Sanford Bernstein upgraded the stock to "buy" with a price target of $92. Next were JPMorgan Chase (JPM) and Bank of America (BAC), up 95 cents to $33.77 and 21 cents to $7.49, respectively.

Boeing, IBM (IBM) and Caterpillar (CAT) added 43 points to the Dow's gain. Twenty-nine of the 30 Dow stocks were higher. The one loser: United Technologies (UTX), down 27 cents to $74.35.

Meanwhile, 446 S&P stocks were higher, led by solar-panel maker First Solar (FSLR) and Federated Investors (FII). Laggards were St. Jude Medical (STJ) and Harman International (HAR).

Eighty-six Nasdaq-100 stocks were higher, with gains for Apple, Microsoft (MSFT), Qualcomm (QCOM) and Intel (INTC) contributing 12 points to the index's gain. (Microsoft is the publisher of MSN Money.)

Michael Kors Holdings (KORS) rose $2.92 to $41.10 as the luxury-goods maker and retailer forecast earnings and sales that beat estimates. The shares hit as high as $42.74. 

U.S. shares of Bombardier (BDRBF) surged 24 cents to $3.79, and Textron (TXT) rallied 94 cents to $24.52 as NetJets, a subsidiary of Warren Buffett’s Berkshire Hathaway (BRK.B), agreed to buy as many as 425 planes from the companies for $9.6 billion. Textron owns the Cessna line of private airplanes. 

Short hits from the markets -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0900%			0.080%			28.57%			800.00%
5-year Treasury note			0.747%			0.691%			11.33%			-10.00%
10-year Treasury note			1.661%			1.600%			5.06%			-11.22%
30-year Treasury bond			2.772%			2.723%			3.74%			-4.05%
Currencies
U.S. Dollar Index			82.449			82.548			-0.82%			2.39%
British pound			1.5538			1.5477			0.81%			0.00%
(in U.S. $)
U.S. $ in pounds			£0.644			£0.646			-0.80%			0.00%
Euro in dollars			$1.25			$1.25			1.02%			-3.62%
(in U.S. $)
U.S. $ in euros			€ 0.801			€ 0.802			-1.01%			3.76%
U.S. $ in yen			79.68			79.39			1.43%			3.35%
U.S. $ in Chinese			6.39			6.35			0.17%			1.05%
yuan
Canada dollar			$0.973			$0.969			0.49%			-0.80%
(in U.S. $)
U.S. dollar			$1.028			$1.031			-0.49%			0.80%
(in Canadian $)
Commodities
Gold (-GC)			$1,613.80			$1,596.80			3.17%			3.00%
(per troy ounce)
Copper (-HG)			$3.336			$3.343			-0.89%			-2.92%
(per pound)
Silver (-SI)			$28.949			$28.616			4.29%			3.70%
(per troy ounce)
Wheat (-ZW)			$6.160			$6.305			-4.31%			-5.63%
(per bushel)
Corn (-ZC)			$5.840			$5.920			5.18%			-9.67%
(per bushel)
Cotton			$0.6781			0.6875			-5.62%			-26.04%
(per pound)
Coffee			$1.5535			1.567			-4.66%			-32.35%
(per pound)
Crude oil (-CL)			$83.32			$82.70			-3.71%			-15.69%
(per barrel)