Dow up; financials, materials jump

NEW YORK - The Dow Jones industrials climbed back above 10,000 Wednesday after investors had second thoughts about the heavy selling in the stock market during the last two weeks.

The Dow Jones industrial average rose 275 points after a modest gain Tuesday. It was the first close above 10,000 since June 28.

But analysts warn that the buying doesn't mean that investors are more optimistic. They said that there wasn't a single catalyst behind the move and that it appeared investors were scooping up stocks that had become cheaper after heavy losses.

Financial stocks rose on an upbeat profit forecast from State Street Corp. Materials stocks rose after having logged steep drops over worries about the economy.

Some traders in the last few weeks had been selling on fears that the country is headed back into recession. They were also buying Treasurys so they could put their money into a safe place.

Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said that what's called a "double-dip" is unlikely, but the idea of one is scary because the government wouldn't have many options to revive the economy a second time.

"When you're driving around on a spare tire, you're on the lookout for nails," he said.

The market's other big concern is forthcoming earnings reports. Investors want to know if companies also are seeing business slow, and if they are changing their forecasts for the coming quarters.

Ablin said the forecast from State Street bolstered confidence ahead of earnings for the April-June period. However, Ablin said he didn't expect the bounce to continue.

The Dow rose 274.66, or 2.8 percent, to 10,018.28. It rose 57 points Tuesday.

The Standard & Poor's 500 index rose 32.21, or 3.1 percent, to 1,060.27, and the Nasdaq composite index rose 65.59, or 3.1 percent, 2,159.47.

Bond prices fell, driving up interest rates.

Crude oil rose $2.09 to $74.07 per barrel on the New York Mercantile Exchange. Gold rose.

State Street rose $3.29, or 9.9 percent, to $36.63. Alcoa advanced 34 cents, or 3.3 percent, to $10.55, while U.S. Steel rose $2.17, or 5.7 percent, to $40.39.

The Russell 2000 index of smaller companies rose 21.63, or 3.7 percent, to 611.66.

Overseas markets closed higher after sliding in early trading. Investors awaited a Thursday meeting of the European Central Bank. Traders expect the bank to keep interest rates unchanged, but will want details on the European Union's "stress tests" of bank balance sheets. The thought that the examination could be more rigorous than first thought helped U.S. stocks and drove the euro higher. Similar tests of U.S. banks in May last year helped bolster confidence in the financial system by reassuring investors that big banks likely would survive a deeper slide in the economy.

Britain's FTSE 100 rose 1 percent, Germany's DAX index rose 0.9 percent, and France's CAC-40 climbed 1.8 percent. Japan's Nikkei stock average fell 0.6 percent.