Stocks climb as Dow adds 409 points

U.S. stocks surged Monday recovering from some of the wreckage left by two weeks of brutal trading that wiped out trillions of dollars in market value.

The Dow Jones industrial average climbed 409 points, or 1.7 percent, in trading Monday. The broader Standard & Poor's 500-stock index and the tech-heavy Nasdaq were both up about 1.5 percent. The gains were buoyed by strength in the share prices of oil and gas companies.

Investors have been torn between enthusiasm for the massive tax cut passed by Congress last year that could provide a huge stimulus to an economy already at full employment and growing fears that interest rates will jump as the federal government borrows massive amounts to cover its growing deficits.

The Dow swung more than 1,000 points, or about four percent on Friday, capping one of the worst weeks on Wall Street since the global financial crisis.

Investors, who in January set a monthly record for sinking money into equity funds, pulled their money out at a record pace in the week ending Feb. 7, according to EPFR, a Cambridge, Mass., firm that has tracked such data since 2000.

The rise in stock prices Monday is giving some investors hope that the worst may be over. After repeatedly breaking records, investors had pushed stock prices too high and it was time for a correction, said Jack Ablin, chief investment officer at Cresset Wealth.

'The market was probably 10 to 15 percent overvalued and we got a 10 percent correction,” said Ablin, who said he moved one client into the stock market on Friday.