Star-Bulletin news services
Stocks up on Fed decision,
consumer confidence
NEW YORK >> Wall Street shot higher yesterday after the Federal Reserve's decision to leave rates unchanged bolstered investor confidence that the economy will rebound strongly. The Dow Jones industrials climbed 140 points, their best advance in a month.
The Nasdaq composite index notched its best gain in nearly four months, while the Standard & Poor's 500 index had its strongest advance in a month.
The Fed's inaction was expected, but investors were pleased that policymakers indicated rates probably would remain at current low levels for some time. The news was particularly welcome after a strong consumer confidence report earlier in the day.
"The Fed statement appeased pretty much everyone," said Keith Keenan, vice president of institutional trading at Wall Street Access, a New York-based brokerage firm. "They hit all the right notes."
"Equity investors wanted them to keep rates low for the foreseeable future. ... And they appeased bond investors by saying inflation was not anywhere in sight," he said.
Advancing issues outnumbered decliners more than 2 to 1 on the New York Stock Exchange. Consolidated volume was heavy at 2.21 billion shares, compared with 1.71 billion traded Monday.
The Dow closed up 140.15, or 1.5 percent, at 9,748.31, having gained 25.70 the previous session. It was the best one-day point gain since Oct. 1, when the blue-chip average rose 194.14 points.
The broader market also moved sharply higher. The Nasdaq composite gained 49.35, or 2.6 percent, to 1,932.26. It was the biggest gain since July 7, when the tech-focused index rose 57.25. The S&P 500 rose 15.66, or 1.5 percent, to 1,046.79. It was the best advance since Oct. 1, when the index gained 22.25.
The Russell 2000 index rose 10.50, or 2 percent, to 525.85.
The price of the Treasury's 10-year note closed up 1/2 point, while its yield fell to 4.20 percent from 4.26 percent Monday. Two-year Treasury notes rose 3/16 point and yielded 1.68 percent, down from 1.79 percent Monday.
Stocks already were trading higher before the Fed decision following an upbeat economic report. The Conference Board said its consumer confidence index rose to 81.1 this month from 77 in September. The business research group said consumers were encouraged by signs of a stronger job market.
Meanwhile, the Commerce Department said new orders for big-ticket goods rose by 0.8 percent in September after a 0.1 percent decline in the previous month. September's reading was slightly lower than forecasts; however, the August number was revised upward Tuesday from the 1.1 percent drop initially reported.
Twenty-nine of the 30 stocks comprising the Dow Jones industrial average finished higher, led by The Home Depot Inc., which climbed $1.50 to $37.50. Boeing Co. finished unchanged.
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