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. Last Updated: 07/27/2016

Stocks Rally In Europe, U.S. as War Fears Lessen

NEW YORK -- Stocks rallied at midday Tuesday as the horror over the deadly plane crash in New York a day earlier subsided and Wall Street bet on a speedy conclusion to the war in Afghanistan.

"The big fear has been we'd get bogged down over there and wouldn't see any resolution," said Jon Brorson, director of equities for Northern Trust Co., which oversees $330 billion. "Any progress on this front is a big psychological boost."

Stocks also leapt in Europe as fears over the Afghan war and a U.S. plane crash eased.

U.S. officials said early information suggested Monday's crash of an American Airlines passenger jet was an accident. The crash, which killed more than 260 people, had raised fears another assault had been waged against the United States.

The blue-chip Dow Jones Industrial Average climbed 159 points, or 1.67 percent, to 9,714. The broader Standard & Poor's 500 index rose 17 points, or 1.52 percent, to 1,135. The tech-rich Nasdaq composite index jumped 46 points, or 2.51 percent, to 1,886.

Winners trounced losers by a ratio of 2 to 1. More than 680 million shares changed handed on the New York Stock Exchange, and more than 1 billion on Nasdaq.

"Today the political concerns have abated a little bit," said Rick Meckler, president of investment firm LibertyView, which oversees $1 billion. "It has allowed those people who would prefer to focus on the economic stimulus in the market to go out and buy."

In Europe, the FTSE Eurotop 300 index of pan-European blue chips was up 3.4 percent, matching levels of early September. The narrower Euro Stoxx 50 index of euro zone blue chips jumped four percent.

The Stoxx pan-European technology index climbed 6.6 percent to its best level since early August, but was still down by half for the year.

Investors feared losing out if they stood on the sidelines, but analysts warned the advance was divorced from fundamentals.

Tuesday's rally was not just a tech affair but broadly-based, with old economy stalwarts like autos, as well as financials, and economy-sensitive cyclicals also making strong gains as parked cash found its way back into equities in general.

"This is not the beginning of a big rally, but it's unlikely we will see the lows again we posted after Sept. 11," said Merrill Lynch European strategist Peter Saacke.

Bourses hit three-year troughs mid-September.

"There is an awful lot of poor macro and earnings news ahead of us which should dampen spirits eventually," he added.

In Asia, Tokyo stocks closed lower as bank shares, including Mizuho Holdings Inc., dropped on nagging worries about massive bad loans, and the passenger jet crash in New York sent airlines lower.

Mizuho, the world's largest bank by assets, fell 1.3 percent to 304,000 yen, and Sumitomo Mitsui Banking Corp. lost 5.85 percent to 644, helping push the Nikkei for a while below the key 10,000 mark for the first time in a month.

The benchmark Nikkei average, however, regained some ground toward close to end the day down 51 points, or 0.51 percent, at 10,030.56, while the broader TOPIX index fell 4.63 points, or 0.45 percent, to 1,016.48.