Stocks Rebound in Volatile Trading

BY

Stocks Surge, Erasing Dow's 2 Percent Drop Friday; Volatility High Ahead of Fed Meeting.

Wall Street surged higher in a volatile session Monday, offsetting the losses it incurred Friday but showing more fractiousness than conviction in an advance that lifted the Dow Jones industrials 286 points, its biggest gain in nearly five years.

Investors tried to balance their concerns about the availability of credit with hopes that
Tuesday's Federal Reserve meeting will be a calming influence after two weeks of frenetic
trading on Wall Street. In a day devoid of economic news and with few earnings reports,
investors early in the session seemed to avoid making big bets, though stocks gained steam
after midday and made their biggest advance in the final two hours.

Fed policy makers are widely expected to hold the nation's benchmark rate steady at 5.25
percent; as usual, the greater concern is with the Fed's economic assessment statement. This
time, investors will be looking to see what the Fed says about credit.

The Dow's biggest single-session point gain since October 2002 and its largest percentage gain
since June 2003 follows a number of choppy sessions in which investor sentiment has vacillated between fear about lending to occasional bursts of optimism. Eight of the last 10 sessions have seen swings greater than 100 points in the Dow. The erratic activity has followed the stock
market's high seen July 19, when the Dow closed above 14,000 for the first time and the
Standard & Poor's 500 index also had a record close.

JKL

thanks