Newspaper article THE JOURNAL RECORD

Fed Inactivity Lifts Stock

Newspaper article THE JOURNAL RECORD

Fed Inactivity Lifts Stock

Article excerpt

NEW YORK (AP) _ Stocks rallied Wednesday amid continued relief that the Federal Reserve did not raise interest rates.

The Dow Jones industrial average rose 15.14 to 3,878.18, posting its third consecutive increase.

Last week, the Dow average fell more than 100 points on expectations that the Fed would raise rates for the sixth time this year at its Federal Open Market Committee meeting on Tuesday. But after the meeting adjourned with no increase, investors gained confidence that interest rates would remain stable for the near future, and they bid prices higher.

"The financial markets were in a mood to rally, largely because of that relief, and nothing could stop them short-term," said Michael Metz, market strategist at Oppenheimer Co.

While many economists expect an increase will come, they said it now appears unlikely before the November elections unless a sharp drop in unemployment is announced Oct. 7, or the Fed sees other fresh signs of inflation.

For now, the mood was celebratory. Unlike the market rallies posted on Monday and Tuesday, which were led by blue chip issues, Wednesday's increases were broad-based. Advancing issues outnumbering decliners by nearly 7 to 4 on the New York Stock Exchange. Big-Board volume totaled 329.65 million shares, up from 290.33 million Tuesday.

Broad market indexes also gained. The NYSE's composite index rose 1.50 to 256.37. The Nasdaq composite index climbed 4.64 to 760.01. The Standard Poor's 500 list advanced 2.79 to 464.84. The American Stock Exchange's market value index added 2.78 to 456.20.

Stocks also got a boost from bonds and the dollar.

The 30-year bond rose 5-16 point, despite an unexpectedly strong reading on durable-goods orders. That also helped investors feel more comfortable buying equities, analysts said.

The Commerce Department said orders to U.S. factories for big-ticket durable goods soared 6 percent in August _ the biggest rise in nearly two years _ after a sharp drop the previous month. …

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