Wall Street rose sharply today as a strong outlook from IBM encouraged investors to buy back into stocks after their huge drop this week.
The Dow Jones industrial average rose more than 100 points in the first minutes of trading.
In the first hour of trading, the Dow shot up 122.34, or 1.01 per cent, to 12,281.55.
Broader stock indicators also rose. The Standard & Poor's 500 index gained 10.44, or 0.78 percent, to 1,343.69, and the Nasdaq composite index advanced 19.65, or 0.84 per cent, to 2,366.55.
The market remains extremely nervous, however, and the Dow, having suffered its worst three-day plunge in over five years, has fallen to levels not seen since last March.
With the banking industry trying to fix its shrinking portfolios and preparing for more distress in consumer debt, the economy may only have the government to fall back on.
Federal Reserve monetary policymakers meet January 29-30, and the market widely expects them to lower the key interest rate, perhaps by a half-point. Federal Reserve Bank of Richmond President Jeffrey Lacker said Friday that more rate cuts are "quite possible."
President George W. Bush is today expected to speak on the economy and discuss a plan to stimulate the economy through tax rebates and other strategies. Treasury Secretary Henry Paulson said he was confident a temporary stimulus package can be agreed upon quickly.