NEW YORK (AP) – Wall Street soared for the second straight day Wednesday, rallying in the last hour of trading after a rebound in financial stocks and optimism about private sector jobs helped investors brush off a sharp jump in oil prices. The Dow Jones industrials rose more than 180 points, bringing its two-day gain to more than 450.

Bank and brokerage stocks, many trading at multi-year lows, turned higher and led the late advance. There was some relief in the market after the Federal Reserve said it would extend and expand its emergency borrowing program for investment banks. The central bank’s move reassured the market that the banks won’t have liquidity problems.

Investors have been worried that some of Wall Street’s biggest names will be marking down more assets, and needing more capital, after Merrill Lynch & Co. unexpectedly announced a $5.7 billion write-down late Monday.

“There’s a growing sense that what we saw out of Merrill Lynch is the beginning of the end for the financial cleanup,” said Craig Peckham, market strategist at Jefferies & Co. He added that the ADP number was also a good sign for the economy.

Earlier, Automatic Data Processing said private sector employment rose by 9,000 this month. After seeing jobs disappear by the thousands in recent months, the stock market is eager for any insights into the Labor Department’s take on the job market on Friday.

That news helped offset a big spike in the price of oil after a weekly Energy Department report on domestic supplies showed a surprise increase. And Israeli Prime Minister Ehud Olmert’s announcement that he plans to resign in September stirred concerns about the viability of Middle East peace efforts and rising tensions with Iran.

Light, sweet crude rose $4.58 to settle at $126.77 on the New York Mercantile Exchange. Oil has fallen sharply, however, since hitting a high above $147 on July 11, and a drop in prices Tuesday contributed to a huge gain on Wall Street.

The late rally may also have been due to technical trading; in times of great volatility, many institutional investors start adjusting their holdings before the closing bell.

According to preliminary calculations, the Dow rose 186.13, or 1.63 percent, to 11,583.69. On Tuesday, the blue chips jumped 266 points, more than wiping out a nearly 240-point loss from the previous session.

Broader stock indicators also surged. The Standard & Poor’s 500 index advanced 21.06, or 1.67 percent, to 1,284.26, and the Nasdaq composite index rose 10.10, or 0.44 percent, to 2,329.72.

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AP-ES-07-30-08 1627EDT

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