<p>Buying accelerated into the close and the S&P 500 posted its best day in more than two years, following a drop of nearly 17 percent over the past weeks. </p>.<p> The market reversed direction six times after a Fed statement that pledged two more years of near-zero interest rates.</p>.<p> Bank shares roared back from recent losses with the KBW capital markets index up 6.7 percent.</p>.<p> "The last three or four weeks, the stock market has really discounted a mild recession," said Mohannad Aama, managing director at Beam Capital Management LLC in New York.</p>.<p> "Now after the Fed announcement, the market has to start factoring in what the response from the Fed and the government will be. There is still a small chance for a fiscal stimulus aimed at job creation. The FOMC statement today was positive for equities."</p>.<p> The Dow Jones industrial average gained 429.92 points, or 3.98 percent, to end at 11,239.77. The Standard & Poor's 500 Index rose 53.07 points, or 4.74 percent, to 1,172.53. The Nasdaq Composite Index added 124.83 points, or 5.29 percent, to 2,482.52.</p>.<p> About 16.4 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq -- more than twice the daily average so far this year of 7.75 billion.</p>.<p> Advancing stocks outnumbered declining ones on the NYSE by a ratio of almost 12 to 1, while on the Nasdaq, almost five stocks rose for every one that fell.</p>.<p> The three major U.S. stock indexes, though, are still in negative territory for the year, in spite of Tuesday's strong rally.</p>.<p> At its session low after the Fed statement, the S&P 500 came within a few points of entering a bear market -- or a 20 percent decline from its recent closing high set on April 29.</p>.<p> According to a Reuters poll, the United States faces one-in-four odds of slipping back into recession, though the economic outlook was seen as raising the likelihood of new Fed action.</p>.<p> Even some investors hoping for action from the Fed acknowledged the central bank's options appear to be limited because the current crisis is not liquidity-driven, as it was in 2008.</p>.<p> Equities suffered a massive drop on Monday, the first session since the United States lost its top-tier triple-A credit rating from Standard & Poor's. As a result of Monday's huge sell-off, the S&P 500 posted its worst one-day percentage loss since December 2008.</p>
<p>Buying accelerated into the close and the S&P 500 posted its best day in more than two years, following a drop of nearly 17 percent over the past weeks. </p>.<p> The market reversed direction six times after a Fed statement that pledged two more years of near-zero interest rates.</p>.<p> Bank shares roared back from recent losses with the KBW capital markets index up 6.7 percent.</p>.<p> "The last three or four weeks, the stock market has really discounted a mild recession," said Mohannad Aama, managing director at Beam Capital Management LLC in New York.</p>.<p> "Now after the Fed announcement, the market has to start factoring in what the response from the Fed and the government will be. There is still a small chance for a fiscal stimulus aimed at job creation. The FOMC statement today was positive for equities."</p>.<p> The Dow Jones industrial average gained 429.92 points, or 3.98 percent, to end at 11,239.77. The Standard & Poor's 500 Index rose 53.07 points, or 4.74 percent, to 1,172.53. The Nasdaq Composite Index added 124.83 points, or 5.29 percent, to 2,482.52.</p>.<p> About 16.4 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq -- more than twice the daily average so far this year of 7.75 billion.</p>.<p> Advancing stocks outnumbered declining ones on the NYSE by a ratio of almost 12 to 1, while on the Nasdaq, almost five stocks rose for every one that fell.</p>.<p> The three major U.S. stock indexes, though, are still in negative territory for the year, in spite of Tuesday's strong rally.</p>.<p> At its session low after the Fed statement, the S&P 500 came within a few points of entering a bear market -- or a 20 percent decline from its recent closing high set on April 29.</p>.<p> According to a Reuters poll, the United States faces one-in-four odds of slipping back into recession, though the economic outlook was seen as raising the likelihood of new Fed action.</p>.<p> Even some investors hoping for action from the Fed acknowledged the central bank's options appear to be limited because the current crisis is not liquidity-driven, as it was in 2008.</p>.<p> Equities suffered a massive drop on Monday, the first session since the United States lost its top-tier triple-A credit rating from Standard & Poor's. As a result of Monday's huge sell-off, the S&P 500 posted its worst one-day percentage loss since December 2008.</p>