NEW YORK -- Stocks roared higher in very heavy trading on Monday, propelling the blue-chip Dow to its third-largest point gain ever, after last week's recovery helped unleash a flood of bargain hunters betting the ravaged market is poised for a turnaround.
"People believe that the selloff went far enough," said Charles White, president of investment firm Avatar Associates, which oversees $2 billion. "There's a ton of cash on the sidelines, and people are willing to bottom-fish."
The broad market last week snapped a three-week losing streak and the blue-chip Dow scored its best weekly gain since mid-May. Investors, emboldened by this showing, flocked to battered shares.
Banking giant JP Morgan Chase & Co. soared nearly 13 percent. Conglomerate General Electric rallied 9.5 percent. Web gear maker Cisco Systems tacked on more than 12 percent.
The lure of cheap stocks was enough to make investors shrug off the latest accounting woes. Wall Street largely disregarded an announcement from local phone company Qwest Communications International that it would restate financial results because it improperly booked $1.16 billion in sales.
"We were all a little surprised by how there wasn't a lot of selling going into the end of (last) week," said Jeff Kleintop, chief investment strategist at PNC Advisors, which oversees $65 billion. "It looks to me like we are working our way through retail investor capitulation, and that's great news."
The Dow Jones industrial average rocketed 447.49 points, or 5.41 percent, to 8,711.88, based on the latest available numbers. The blue-chip index flew up nearly 500 points last Wednesday to post its second-biggest one-day gain ever.
The Nasdaq Composite Index soared 73.13 points, or 5.79 percent, at 1,335.25, scoring its biggest percentage gain in nearly ten months. The technology-loaded index last week wrapped up its fourth straight week of declines.
The Standard and Poor's 500 jumped 46.12 points, or 5.41 percent, to 898.96. The broad index ended last week up 0.6 percent after three straight weeks of declines.
The Dow has scrambled up nearly 1,200 points since last Wednesday after being pounded to 1998 levels by accounting scandals. Investors have found some measure of comfort in moves toward a government crackdown on corporate fraud and efforts by firms to address calls for more disclosure.
Monday's winners trounced losers by a ratio of 9 to 2 on the New York Stock Exchange and about 13 to 4 on Nasdaq. Trading was extremely heavy, following a pattern set in recent sessions. More than 1.77 billion shares changed hands on the Big Board, and about 1.9 billion shares on Nasdaq.
But some analysts are skeptical of the sudden advance. Executives at close to 1,000 companies must attest to the validity of their financial statements on -- or soon after -- Aug. 14 to comply with a U.S. Securities and Exchange Commission order. Companies may feel compelled to air dirty laundry ahead of the August deadline.
"The market went down too far, too fast, but I don't trust the rally today," said Stanley Nabi, managing director at Credit Suisse Asset Management, which manages about $260 billion globally. "There are still things we have to get over."
General Electric (GE) ranked as the New York Stock Exchange's most active stock, bolstering the Dow with a gain of $2.65 to $30.45. GE chief Jeff Immelt on Friday said he would split the conglomerate's profit-driving finance arm, GE Capital, into four parts. Investors have complained GE Capital does not give enough insight into how it makes its profits.
Qwest (Q) lost 1 cent to $1.49. The No. 4 U.S. local phone company, already under federal investigation for its accounting practices, said it would restate its financial results because it improperly booked $1.16 billion in sales and other items in 1999 to 2001.
Banking stocks helped give the market a hefty boost, snapping back from a sharp decline last week spurred by fears about possible Enron-related liabilities and loan losses.
J.P. Morgan (JPM) surged $2.85 to $25.10. Citigroup (C) rose $2.57 to $33.31, while American Express rallied $3.32 to $33.49. The Philadelphia Stock Exchange's bank index raked in a 6.84 percent gain.
Technology heavyweights made a comeback. Software giant Microsoft (MSFT) rose $2.90 to $48.25, while Cisco (CSCO) jumped $1.49 to $13.31. Chip leader Intel (INTC) climbed $1.08 to $18.89.
AOL Time Warner (AOL), which took a hit last week after it announced federal regulators were probing the accounting practices at its online unit, rose 68 cents to $11.58.
WorldCom, the bankrupt long-distance phone company, jumped 5.5 cents, or 29 percent, to 24.5 cents. The company tapped two members of a corporate turnaround firm to oversee its restructuring and straighten out its finances.
Dynegy (DYN), a cash-strapped power trader fighting to stay alive, surged 76 percent, or 52 cents, to $1.20. The company said it was selling its Northern Natural Gas pipeline for $928 million to a company controlled by billionaire investor Warren Buffett.
