LOS ANGELES, — In Wall Street's continuing game of stock-market roulette, share prices soared in the last hour of trading Tuesday, sending the Dow Jones industrial average up almost 900 points, its second-biggest point gain on record.
But if investors hope the rally signals a change in the market's fortunes, they may be disappointed.
The Dow jumped 889.35 points, or 10.9%, to 9,065.12. It was the blue-chip index's sixth-biggest one-day percentage gain ever.
The advance was the latest in the series of wild market swings that have made the market's current swoon even more unnerving for investors. The Dow, which is down 16% this month even after Tuesday's rise, has recorded triple-digit gains or losses in all but two of the month's 20 trading days so far.
And Tuesday's gain by the Dow was the biggest only since Oct. 13, when the Dow jumped 936 points, or 11.1%.
There was no apparent reason for the latest surge -- which came on a day when the economic news was mostly gloomy -- adding to a feeling among some market watchers that the rally might have been little more than a head fake.
"I'm very hesitant to read anything significant into it," said Richard Weiss, chief investment officer for City National Bank in Beverly Hills. "I'm not convinced that this is the end of the downturn, unfortunately."
The rally came as the Federal Reserve began a two-day meeting in Washington. Investors are betting that the central bank will cut its benchmark lending rate today to 1% from 1.5%, its lowest level since 2004.
Rate cuts are intended to stimulate lending, a top priority for central bankers around the world as they try to thaw out frozen credit markets and avert a deep and long-lasting recession.
In addition to gushing liquidity from the Federal Reserve, the Treasury Department started this week to disburse the first of potentially $700 billion to banks and certain other companies that are short of capital. Administration officials have been exhorting banks to start using the capital to make loans.
"What we're trying to do is get banks to do what they are supposed to do, which is support the system that we have in America," White House spokeswoman Dana Perino said Tuesday. "And banks exist to lend money; that's how they make money."
For months, the Fed has been devising ways to funnel cash into problem areas of the credit markets in an effort to keep the economy going. This month the central bank said it would start buying commercial paper -- short-term debt issued by some companies to help fund daily operations.
