Richard Drew / AP
Specialist Michael Gagliano, foreground right, calls out prices at his post on the floor of the New York Stock Exchange on Tuesday
Stocks rallied big-time in the last half-hour of trading Tuesday despite the S&P 500 fitting the description of a bear market just 45 minutes earlier.
According to preliminary calculations, the Dow Jones Industrial Average closed up 153.34, or 1.44 percent, to 10,808.64. The index surged 270.49 points, or 2.57 percent, in the final 30 minutes of trading.
The S&P 500 rose 24.66, or 2.4 percent, to end trading at 1,123.89. The Nasdaq was 68.99 higher, or 2.95 percent, to 68.99.
At 3:15 p.m., according to the Associated Press, the Standard and Poor's 500 index was down 20 points, or 1.8 percent, at 1,079. The setback left the S&P 500 index down 20 percent from its April peak, a drop that is widely considered the start of a bear market.
At 3:25 p.m., also according to the AP, the market began rising quickly after several news outlets reported that European financial ministers were working on a way to coordinate their efforts to support European banks, as they did during the financial crisis in 2008. Worries that U.S. and European banks could get hammered by a Greek default have been a major concern among investors.
"Right now fear is trumping fundamentals and people are buying on nothing more than rumors," said Mark Lamkin, head of Lamkin Wealth Management told the news service. "It's not business risk that the market is concerned with, it's systemic risk. If there truly is a solution to Europe's problems, then we'll set the stage for a nice rally."
Stocks had moved lower entering the last hour of trading Tuesday as a gloomy outlook from Federal Reserve Chairman Ben Bernanke may have sapped the confidence of investors who had shares rising at midday.
Bernanke told lawmakers in a Capitol Hill hearing today that any economic recovery is “close to faltering” and there was a likelihood of of more “sluggish job growth ahead.”
One stock in particular that took a beating was Apple. On a day that CEO Tim Cook made new product announcements, shares of the company began sliding soon after he took the stage. At one point shares were down nearly 4 percent but recovered a bit later to end the day around 1 percent lower.
European finance ministers are looking at making banks take bigger losses on Greek debt, and they have delayed a vital aid payment to Athens until mid-November, setting up a crunch point in the region's sovereign debt crisis, according to the news wire.
Also across the Atlantic, France and Belgium were fighting to prevent struggling bank Dexia from going under as investors grew increasingly worried about its ability to survive a renewed credit crunch.
And if that wasn’t enough bad news, Goldman Sachs has cut its outlook for gross domestic product for advanced economies for 2012, seeing growth of 1.3 percent instead of its previous expectation of 2.1 percent.
Prior to the session-ending rally, a group of experts discussed the wild day, and what may happen tomorrow on Wall Street, with CNBC.