Stocks surge after bank’s profit report

April 10, 2009 at 12:00a.m.

Mixed economic news didn’t faze investors.

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 pickup 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.

According to preliminary calculations, the Dow rose 246.27, or 3.1 percent, to 8,083.38. It was the blue chips’ first close above the 8,000 mark in nearly a week and the highest finish since Feb. 9. The Dow hadn’t logged five straight weekly gains since Oct. 2007, the stock market’s peak.

Broader stock indicators also rose sharply. The Standard & Poor’s 500 index rose 31.40, or 3.8 percent, to 856.56. Like the Dow, it was the highest close for the S&P 500 since Feb. 9.

The Nasdaq composite index rose 61.88, or 3.9 percent, to 1,652.54, its highest finish of the year. In 2009, the index is up 4.8 percent.

For the week, the Dow rose 0.8 percent, the S&P 500 rose 1.7 percent and the Nasdaq added 1.9 percent.

Investors appeared unfazed by uneven monthly sales reports from retailers and mixed economic news.

Wal-Mart Stores Inc. reported lower-than-expected sales in March, sending its shares down 3.7 percent, making it one of only three stocks to fall among the 30 companies that make up the Dow.

Target Corp. rose 6.1 percent after posting results that topped expectations, and teen clothing retailer Abercrombie & Fitch Co. slid 3.5 percent after its numbers came in weaker than expected.

In economic news, new jobless claims fell more than expected last week, but those continuing to receive unemployment benefits set another high. The number of laid-off Americans receiving unemployment rose to 5.84 million from 5.75 million, the most on record since 1967 and more than analysts expected.

The jump in stocks comes at the end of a relatively quiet holiday week.