New York – Stocks advanced solidly Thursday, led by strong gains among the blue chips and mortgage lender Countrywide Financial Corp., which signaled a possible thawing in the credit markets with the announcement it had lined up additional financing.
The Dow Jones industrial average rose by more than 130 points after General Motors Corp. surged 10 percent following reports that talks between the automaker and workers over the thorny issue of health-care costs have perhaps been fruitful. Meanwhile, McDonald’s Corp. closed at an all-time high after boosting its dividend.
Investors, who have been nervous about the economic fallout from rising mortgage defaults and tightness in the credit markets, were relieved to hear Countrywide – the nation’s largest mortgage lender – secured $12 billion in credit.
“It appears that this credit crunch may not be as bad as some people thought,” said Charles Norton, principal and portfolio manager at GNICapital, crediting the Countrywide news with lifting overall investor sentiment.
The Dow rose 133.23, or 1 percent, to 13,424.88.
Broader stock indicators also advanced, though more modestly. The Standard & Poor’s 500 index rose 12.39, or 0.84 percent, to 1,483.95, and the technology-heavy Nasdaq composite index rose 8.99, or 0.35 percent, to 2,601.06.
Government bond prices fell sharply as stocks advanced and investors grew more confident they could move out of the safest bets. The yield on the 10-year Treasury note, which moves opposite its price, jumped to 4.48 percent, from 4.41 percent late Wednesday.
