On the Brink: Dow Near Key 8000 Level

Enthusiasm over a favorable accounting rule and a coordinated global effort to shore up the economy lifted the Dow briefly above 8000 before it settled lower at the closing bell.

Stocks turned sharply higher Thursday, as traders cheered the start of the G-20 economic summit and welcomed an accounting change that could improve the appearance of their portfolios. The Dow Jones Industrial Average picked up 216 points at 7977. The surge was consistent with a bullish streak for the Dow, which, heading into today, had risen 17.7% since hitting its low for the year on March 5.

The broader indexes also advanced. The Nasdaq rose 51 to 1602, and the S&P 500 increased 23 at 834. 

Financials led the pack. Citigroup (C), Bank of America (BAC), JPMorgan Chase (JPM) and HSBC (HBC) each posted substantial gains, as the banks stand to benefit from a change in accounting practices. The Financial Accounting Standards Board signed off on a provision that will allow banks holding toxic assets to hang on to them without additional writedowns.

Energy stocks also did well as oil prices surged with the broader market. Crude traded up $4.01 at $52.40 a barrel.

As the world's leaders gathered in London to address the most wide-spread economic collapse since the Great Depression, details began to emerge over what tangible plans could emerge from the dialog. Representatives from France and Germany called for new policies to curb tax havens, regulate hedge funds and bring stability to the world's markets. However, differences of opnion could remain an obsticle to swift and decisive action.

"I wish they (the differences) were manufactured and then they would be easily ironed out," the U.K.'s business minister, Peter Mandelson, said in an interview with BBC Television. "They have persisted overnight but I think you'll get an outcome that corresponds to people's levels of expectations and ambitions."

World markets were mostly higher on the meeting. In Asia, Hong Kong's Hang Seng jumped 7.4%, while Japan's Nikkei climbed 4.4%. In Europe, the major indexes of London, Paris and Frankfurt each closed up more than 4.0% in afternoon trading.

At home, the latest jobless claims report came in gloomier than expected -- a report consistent with recent employment data and a bad sign ahead of tomorrow's jobs report.

Meanwhile, economists have already begun worrying about the next big threat: a boomering recession caused by inflation brought on by the tools of the recovery. On the upside, it won't happen until next year.