Stocks Closed Higher after Late Rally

U.S. stocks Tuesday closed higher with a late afternoon rally on reports that European officials were working on a plan to prop up the region’s struggling banks. The Dow Jones Industrial Average rose 153.41 points, or 1.44%, to 10,808.71. The S&P 500 closed up 24.72 points, or 2.25%, to 1,123.95. The Nasdaq Composite added 68.99 points, or 2.95%, to 2,404.82.

European Union finance ministers are looking into ways to coordinate recapitalizations of financial institutions after agreeing that additional measures are needed to prop up the region’s banks, the Financial Times reported on its website Tuesday. Specific details of the plan are still under discussion but officials have concluded that they had not done enough to assure the markets that European banks can weather the current crisis.

Federal Reserve Chairman Ben Bernanke says the economic recovery “is close to faltering” and the central bank is prepared to take further steps to support it. The economy is growing more slowly than the Federal Reserve had expected, Bernanke said Tuesday before the congressional Joint Economic Committee. He said the biggest factor depressing consumer confidence is poor job growth.

Apple Inc. unveiled a new iPhone on Tuesday that is faster and more powerful but stops short of a more radical upgrade. It said Sprint customers will now be able to use one. The new iPhone 4S has an improved camera with a higher-resolution sensor. The processor is faster, which helps run smoother, more realistic action games. It’s also a “world phone,” which means that Verizon iPhones will be able to useable overseas, just as AT&T iPhones already are.

Crude-oil futures fell Tuesday, finishing below $76 a barrel for the first time in more than year. Crude oil for November delivery fell $1.94, or 2.5%, to settle at $75.67 a barrel on the New York Mercantile Exchange.