Video

The bulls reigned supreme - with the Dow enjoying its second best point gain of the year - as a Federal Reserve official boosts hopes of a rate cut. Stocks sprinted higher by more than 2 percent across the board. The Dow gained 331 points. The S&P 500 jumped 40 points. The Nasdaq vaulted 82 points - a gain of about 3.2 percent. The bulls were back in charge just days after stocks fell 10 percent from record highs - suggesting the market was in a corrective phase. Analysts say now it looks like predictions of a prolonged economic recession were overblown. Alec Young is an equity strategist at Standard & Poor's. SOUNDBITE: Alec Young, equity strategist, Standard & Poor's (ENGLISH) saying: "I think investors are starting to look at the glass as a little bit more half-full. Certainly there are still a lot of negative headwinds out there for the economy. But investors are confident that maybe they've priced in the worst and the market has at least found a bottom for the short term." Donald Kohn - the No. 2 at the Fed - added fuel to the bull run. He said fellow policymakers must be ready to cut interest rates if the economy weakens or the credit situation worsens. And according to the latest Fed survey - economic growth is slowing due to the housing slump. Wall Street is pricing in a December rate cut with overwhelming certainty. Citigroup was the biggest volume mover at the NYSE. Its stock was up close to 7 percent. Bank of America was up about 4-1/2 percent. JP Morgan Chase rallied nearly 4 percent. Meanwhile, some traders saw something positive in the latest housing report. Previously owned homes are selling at their lowest rate on record. But the drop last month was not that much worse than predicted. Oil prices had their biggest drop in over 3-months - tumbling near $4 in one-day. Traders responded to the weekly report showing crude supplies did not drop as much as expected. As for European trading....no slackers there... The German Dax, The Paris CAC-40 and the London FTSE each up well over 2 percent. Conway Gittens, Reuters.