Dow Ends up Nearly 380 on Citigroup Profit News

Wall Street snapped out of its stupor and posted its best performance of the year Tuesday, finding a badly needed glimmer of optimism in the most unlikely of places: Citigroup is actually managing to turn a profit. The 379-point gain for the Dow Jones industrials, a rally of almost 6 percent, was a welcome break from almost uninterrupted selling. But just as almost nobody expects the banks to snap back to health, almost nobody thinks the market has hit its bottom.

"One day isn't going to make a trend," said Kurt Karl, chief U.S. economist at Swiss Re.

Banking stocks led the markets higher all day. The Dow finished at 6,926.49, its highest close since late February. All 30 of the Dow industrial stocks gained ground.

On Tuesday, the S&P closed at 719.60, still less than half of its value at the market peak in October 2007.

Jon Merriman, chief executive of brokerage Merriman Curhan Ford in San Francisco, said the letter from Citi's CEO shows the bank is lending. Government officials and market analysts alike have said more lending is key to an economic recovery.

"Maybe Citibank is not going to zero, that means it's going to lend again and then the economy will turn," he said. "People today in the stock market are connecting those dots. And the market is up broadly, it's not just the banks."