Dow notches best gain in two weeks

Stocks posted their biggest jump in nearly two weeks on Tuesday. Investors picked up cheaply priced stocks after fears that the U.S. would slip into a recession pounded the market over the last month.

The Dow Jones industrial average jumped 322 points, its best day since Aug. 11, when it gained 423. The Dow dipped about 60 points shortly after an earthquake hit the East Coast at 1:51 p.m., but recovered within 20 minutes and soared even higher in the afternoon.

James Paulsen, chief investment strategist at Wells Capital Management, said the beating stocks have taken since late July made it look like investors were preparing for a recession. Investors questioned that bleak outlook Tuesday after a manufacturing survey from the Richmond, Va., branch of the Federal Reserve pointed to a slowdown, not a recession.

The Dow, which tracks 30 huge U.S. companies including IBM Corp. and General Electric Co., closed with a gain of 2.97 percent at 11,176.76. Indexes that track smaller stocks did even better, a sign that investors were more willing to take on risk.

The Standard & Poor's 500 index rose 38.53 points, or 3.43 percent, to 1,162.35. The Nasdaq composite, which tracks mainly technology companies, rose 100.68 points, or 4.29 percent, to 2,446.06. The Russell 2000 index of smaller U.S. companies gained even more, 4.87 percent.

Exxon Mobil Corp. rose the most of the 30 stocks in the Dow, 4.96 percent. Chevron Corp. was also up 4.32 percent. Energy stocks got a push from a slight increase in the price of oil, to $85.44 a barrel. The dollar fell against the euro and Japanese yen as investors moved money into riskier assets.

Bank of America Corp. lost the most of any Dow stock, 1.87 percent. The stock fell 35 percent this month as investors become increasingly worried about the bank's ability to raise capital and its liabilities related to subprime mortgages. -- AP