Recession, my arss. Cheney/Bush are full of it up to their ears.
Dow shoots to eight-month high
NEW YORK (Reuters) - Stocks rocketed higher on Wednesday, with the Dow Jones industrial average rising to an eight-month high and closing above 11,000 for the first time since late last summer, as investors reasoned five interest-rate cuts by the Federal Reserve all but ensure a return of strong corporate-profit growth.
The blue-chip Dow average shot up 343.15 points, or 3.16 percent, to 11,216.12, according to the latest data. That marked the Dow's highest close since Sept. 12, and the first finish above 11,000 since Sept. 14. It was the Dow's fifth-largest point gain ever.
The Nasdaq Composite Index jumped 80.94 points, or 3.88 percent, to 2,166.52. The benchmark Standard & Poor's 500 Index leaped 35.56 points, or 2.85 percent, to 1,285.00, the highest close in four months.
The rally took root about one hour into the trading day, when early bearishness on the Fed's warning late Tuesday about economic weakness evaporated with buying that snowballed through the day, a delayed positive response to the central bank's fifth rate cut this year. The serial reductions in rates are part of the Fed's campaign to prevent the flagging U.S. economy from slipping into recession by lowering borrowing costs for businesses and consumers.
"There is a ton of money out there and whenever people see a rally, they say, 'Hey, maybe I better put some money to work here.' That and a subway token will get you a ride uptown," said Ned Collins, a trader at Daiwa Securities America, sceptical of the rally one day after the latest cut in borrowing costs. "I just don't believe we have come to the end of profit warnings and I think earnings are going to be key."
Bullish comments out of software maker BEA Systems Inc., chip equipment maker Applied Materials Inc. and doughnut maker Krispy Kreme Doughnuts Inc. helped boost sentiment a day after the Fed slashed rates by 50 basis points.
A milder-than-expected read on inflation also lifted Wall Street's mood. The Consumer Price Index, a key inflation indicator, rose 0.3 percent in April, less than the 0.4 percent gain expected by economists, according to the Labor Department. Tame inflation could clear the way for the Fed to continue its series of aggressive rate cuts, analysts said. |
