Wall Street rallied on Thursday afternoon to avoid steep losses, due to reports that Bank of America may receive another $15 billion from the government plus guarantees following its purchase of troubled brokerage Merrill Lynch. Stocks fell sharply in the morning, extending the 2009 market sell-off, on concerns about the banking sector, the future of Apple amid health problems of its chief executive, and the depth of the recession. But stocks rebounded in the afternoon after more information circulated about the government's economic stimulus plan and reports that Bank of America may get a government-backed guarantee of as much as $200 billion. Investors welcomed the latest details about the proposed stimulus plan. House of Representatives Democrats proposed an $825 billion package that includes $550 billion in spending and $275 billion in tax cuts over two years. In economic news, the number of Americans filing jobless claims rose more than expected last week. The producer price index—a measure of wholesale inflation—fell 1.9 percent in December Light sweet crude oil for February delivery fell $2.10 to $35.18 a barrel on the New York Mercantile Exchange. The U.S. dollar gained versus the euro and the yen. The Dow Jones industrial average rose 12.35, or 0.15 percent, to 8,212.49. Bank of America plunged 18 percent on reports the company is seeking billions of dollars more in federal funds to help it complete the purchase of Merrill Lynch. Shares had fallen by more than 26 percent in the morning before the market reversed direction. Citigroup shares fell 15 percent, one day before the bank is expected to report another huge quarterly loss and announce restructuring moves. Earlier, shares had been down as much as 25 percent. J.P. Morgan Chase reported a surprising quarterly profit, but its shares fell 6 percent. The broader Standard & Poor's 500 index rose 1.12, or 0.1 percent, to 843.74. The technology-heavy Nasdaq composite index rose 22.20, or 1.5 percent, to 1,511.84. Apple chief executive Steve Jobs said he is taking a medical leave through the end of the second quarter because his health issues are “more complex” than he originally thought. Shares lost 2.2 percent, erasing bigger losses. The New York Stock Exchange composite index rose 19.07 to 5,347.75. The American Stock Exchange composite index rose 11.81 to 1,350.57. And the Russell 2000 index rose 9.45 to 462.62.
