NEW YORK -- Stock prices leaped yesterday in what traders saw as a continued reaction to Friday's sharp cut in the discount rate and, hard on its heels, a cut in many banks' prime-lending rates.
The Dow Jones industrial average surged past the 3,000 barrier for the first time in more than a month to end at 3,022.58, up 88.10 points, or 3 percent.
The percentage gain was the best since Aug. 21, when stock prices rebounded after the failed coup in the Soviet Union.
Trading was surprisingly heavy for a day that many expected to be a slow pre-Christmas session, with volume on the New York Stock Exchange hitting 229.2 million shares. That compared with more hectic trading on Friday, when 318.4 million shares changed owners on a day when various options contracts expired.
A firm bond market, along with lower interest rates, gave stocks early support. Prices of Treasury notes and bonds rose.
The breadth of the market was overwhelmingly on the buy side as advancing issues on the Big Board outnumbered decliners by more than 3 to 1, with gainers totaling 1,410.
The Standard & Poor's index of 500 stocks also had a big day, gaining 9.78 points, to finish at 396.82. The Big Board composite index rose 5, to 218.13, and the American Stock Exchange composite added 3.71, to end at 370.93.
Trading on NASDAQ took the composite index 8.14 points higher, to 543.90, while the Russell 2,000 index, a barometer of small stocks, gained 1.83, to close at 177.90.