Stocks Rally on Global Economic Recovery Hopes

The markets opened higher on hopes of China-led global economic recovery which boosted the oil sector. Meanwhile, the Obama administration unveiled a mortgage refinancing program to help 9 million homeowners. The Dow surged nearly 80 points to 6805 while Nasdaq leaped 20 points to 1341.

On the upside

Oil and metals stocks attracted investors. Shares of Alcoa (NYSE: AA) and Freeport-McMoran Copper & Gold (NYSE: FCX) rose sharply.

Shipping companies join the rally with shares of Eagle Bulk Shopping (Nasdaq: EGLE) and DryShips (Nasdaq: DRYS) among the morning's big gainers.

Discount retailers Big Lots (NYSE: BIG) posted lower 4th quarter revenues and profits, but the results beat estimates. Meanwhile, management raised its outlook for 2009.

On the downside

The cost of protecting debt held by General Electric Capital Corp (NYSE: GE) against default rose to record 20%. The stock of its parent company promptly tumbled to mulit-decade lows.

MGM Mirage (NYSE: MGM) delayed its quarterly filing with the SEC. Investors worried that the hotel and casino operator may default on debt and interest payments.

New Gold (Alternext: NGD) and Western Goldfields (Alternext: WGW) announced a merger as near equals.

In the broad market, advancing issues outpaced decliners by a margin of nearly 3 to 1 on the NYSE and by more than 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks rose 3 points to 364.