Stocks lurch higher on positive news

Lurching higher in its week of whiplash, Wall Street recorded one of its biggest gains of all time Thursday after investors seized on a few signs that the economy might just be able to avoid a new recession.

The Dow Jones industrial average soared 423 points, another dizzy day after falling 634 points Monday, rising 429 Tuesday and dropping 519 Wednesday. Never before has the Dow had four 400-point swings in a row.

The pieces of news that sent Wall Street rocketing higher were not exactly blockbusters: Cisco Systems said its profit was better than expected, the job market got a little better, and France tried to raise confidence in its shaken banking system.

But this week, any move by the market -- higher or lower -- seems to touch off an investor stampede. So it was on Thursday, when stocks shot higher at the opening bell.

Carlton Neel, who manages about $2 billion as a senior portfolio manager at Virtus Investment Partners, said investors are so scared of being late to a rally or a sell-off that they are trading in herds.

"Fear tends to be a much more powerful emotion, and the sell-offs tend to be more violent than the rallies," he said. "But people are worried about missing the bottom, so you will have a few melt-ups along the way." The four days of trading this week have been the wildest for the market since the financial crisis during the fall of 2008. Each day has instantly taken a place in Wall Street history. The Dow's losses on Monday and Wednesday were its sixth- and ninth-largest by points, and its gains on Tuesday and Thursday were the 10th- and 11th-largest.

The Standard & Poor's 500 index has risen or fallen at least 4 percent each day. That has not happened on four consecutive days since November 2008, the depths of the crisis.

It's only the third time since 1934, said Kevin Pleines, an analyst at Birinyi Associates. The first was October 1987 -- including the day known as Black Monday, when the S&P plunged more than 20 percent.

American investors got an encouraging report Thursday before the market opened when European stock markets turned around their losses and had one of their best days in recent weeks. Also, an hour before the U.S. markets opened, the government reported that the number of people filing for unemployment benefits fell below 400,000 for the first time since April.

The Dow finished at 11,143.31, up 423.37 points, just under 4 percent. The S&P 500 finished up 4.6 percent and the Nasdaq composite index 4.7 percent.

Three weeks ago the stock market began a long losing streak, and since then the Dow is down almost 1,600 points, or about 12 percent. It is still up 70 percent since March 9, 2009, its lowest point after the 2008 financial crisis.