Dow Sees Biggest Gain in 5 Years Before Fed Meeting

Markets break out of three-week slump
By Greg Atwan,  Newser User
Posted Aug 6, 2007 3:58 PM CDT
Traders work on the floor of the New York Stock Exchange, Monday, Aug. 6, 2007. Stocks fluctuated in early trading Monday following a sharp pullback Friday brought by concerns about the credit market...   (Associated Press)
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(Newser) – US stocks posted major gains after three straight weeks in the red, as blue chips advanced cautiously in the wake of last week's selloff. The Dow was up 286.87 to 13468.78, its best close since October, 2002, mainly following long-suffering financial companies. Merrill Lynch got a boost from a UBS upgrade; Citigroup and Wells Fargo also gained, after last week's bloodletting under the subprime scalpel.

Traders had one eye on the Fed, which meets tomorrow. Rumors are multiplying that the body will cut interest rates—soon, if not immediately—to give the economy a shot in the arm. Meanwhile, crude was down $3.42 to close at $72.06, on presumptions that a slump would mean a slide in demand. The Nasdaq added 36.08 to close at 2547.33, while the S&P climbed 34.61 to 1467.67.