Closing Market Report
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Dow moves close to 2000 record
By Tim Paradis
Associated Press
NEW YORK » Wall Street surged higher yesterday, carrying the Dow Jones industrials to their second-best close ever as positive economic data further buoyed a growing sense of optimism among investors. The Dow closed just 53 points away from its record high close.
Stocks, particularly blue chips, rose after the Conference Board said its consumer confidence index for September rose more than expected, reaching 104.5 from a revised reading of 100.2 in August. Analysts forecast the index would rise to 103.
Also bolstering investor enthusiasm was a report from the Federal Reserve Bank of Richmond that showed the region's economy strengthened this month. The bank's manufacturing index came in at 9 versus 3 in August.
Jack Albin, chief investment officer with Harris Private Bank, said the market's advance reflects widespread investor enthusiasm and a realization that the Federal Reserve might have room to ease short-term interest rates. He pointed to low inflation and the recent, nearly 20 percent pullback in oil prices.
"The Fed has a lot more elbow room to lower rates. The Fed could maybe even lower this year."
The Dow gained 93.58, or 0.81 percent, to 11,669.39. The Dow's advance put it within range of its high of 11,722.98 set in January 2000.
Broader stock indicators also jumped. The Standard & Poor's 500 index rose to a five-and-a-half-year high, gaining 9.97, or 0.75 percent, to 1,336.34, and the Nasdaq composite index rose 12.27, or 0.55 percent, to 2,261.34.
Bonds fell after a sharp rally Monday in what was perhaps some profit-taking. The yield on the benchmark 10-year Treasury note rose to 4.58 percent from 4.54 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.
Light crude oil settled down 44 cents at $61.01 on the New York Mercantile Exchange. The slide in oil prices this month has given Wall Street investors optimism that consumer spending will hold up even as the economy slows and help protect corporate profits.
Investor sentiment has strengthened since the Fed's August decision to leave interest rates unchanged after a two-year string of 17 straight increases. That enthusiasm became more widespread after the central bank held off again last week, signaling to investors that inflation remained within reasonable limits.
Recent reports on the health of the economy appeared to ease concerns held by some that the Fed had overreached in its bid to corral inflation.