Stocks rise on hopes
about interest rates

NEW YORK » Investors sent stocks moderately higher yesterday after the market viewed a Federal Reserve report on the economy as a sign that the Fed's string of interest rate hikes might be near an end.

Wall Street was mired in a narrow trading range until midafternoon, when the Fed released its Beige Book, a survey of the business climate around the country. The central bank said the job market improved and that inflation, a concern for the Fed and the stock market, was fairly contained. Seven out of 12 districts reported their regional economies were growing or holding steady.

"It's a more benign take than previous Beige Books," said Robert Tipp, chief investment strategist for Prudential Investment Management fixed income. "It will presumably open their eyes (the Fed's) to the fact that the economy could be cooling ... and they won't have to continue raising rates more than another two or three moves."

The day's other economic data were also strong: New home sales set a record in June and factory orders for big-ticket manufactured products rose at a strong clip. Analysts said investors were hearing the good economic news that they've been hoping for.

"The economic slowdown that was supposed to be happening at this time of year isn't happening," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.

Meanwhile, corporate earnings remained upbeat, with more companies surpassing expectations than missing them. The latest positive surprises came from Boeing Co. and Amazon.com Inc., whose stocks shot up after they reported earnings.

The Dow Jones industrial average rose 57.32, or 0.54 percent, to 10,637.09.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 5.63, or 0.46 percent, to 1,236.79, reaching another four-year high, and the Nasdaq composite index rose 10.23, or 0.47 percent, to 2,186.22.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.26 percent from 4.23 percent late Tuesday. The U.S. dollar was down against other major currencies. Gold prices were higher.

Boeing rose 35 cents to $66.70 after the aerospace firm beat Wall Street earnings expectations and the company boosted its outlook for the year due to expected strength in its core commercial airplane and defense units.

Amazon also beat forecasts when it reported earnings after the close of regular trading Tuesday. Amazon, which said its sales rose 26 percent in the second quarter, rose $5.91 to $43.65.