LITTLE ROCK — Stocks leapt to multi-year highs and recorded one of their biggest gains of the year Monday after Federal Reserve Chairman Ben Bernanke suggested that the economy still needs help to produce faster job growth.
The Dow Jones industrial average climbed 160.90 points to 13,241.63, its third-best showing this year. The Standard & Poor’s 500 index rose 19.40 points to 1,416.51, its highest close since May 2008.
The Nasdaq composite index, which is closing in on a 20-percent rally for the year, climbed 54.65 points to 3,122.57, its best finish since November 2000.
Health-care stocks led the market. The U.S. Supreme Court heard the first of three days of arguments on the constitutionality of President Barack Obama’s 2010 healthcare law, which will require Americans to carry insurance or pay a penalty.
Health-care stocks gained 1.7 percent as a group. Aetna gained 3.1 percent, WellPoint 2.9 percent and United Health Group 2.7 percent. The court is expected to decide the case in June.
Bernanke, speaking to a group of economists, sounded pessimistic about jobs even though the country added an average of 245,000 jobs each month since December and the unemployment rate has fallen steadily since last summer.
He noted that the number of people working and the hours they work are well below where they stood before the 2008 financial crisis. He also suggested that some of the decline in the rate was because discouraged workers gave up looking for work.
Bernanke’s comments could mean two things for the market.
On one hand, they suggest that he believes the Fed needs to continue to prop up the economy - by keeping short-term interest rates near zero and perhaps by buying more bonds later.
Some observers focused on Bernanke’s remarks that some recent hiring is merely companies making up for laying off too many people in 2009, rather than a sign of a growing economy.
Stocks mostly rose in Europe. Germany’s DAX index climbed 1.2 percent after a measure of business confidence in that country rose for the fifth month in a row. France’s CAC-40 rose 0.7 percent, and in London, the FTSE rose 0.8 percent.
The euro gained less than a penny against the dollar, to $1.335. Gold rose $23.20 to $1,685.60 an ounce.
The yield on the 10-year Treasury note rose to 2.25 percent from 2.23 percent late Friday. Rising yields are a sign that investors are willing to take money out of safer government bonds and put it into riskier investments like stocks.
The price of crude oil settled at $107.03, up 16 cents, and the average price of gasoline hit $3.90 per gallon. Last year’s peak was $3.98, but that was set in May, when the summer driving season begins and prices usually rise.
Business, Pages 22 on 03/27/2012