Stocks End Higher as Data Reassures
By REUTERS
Filed at 4:48 p.m. ET
NEW YORK (Reuters) - U.S. blue chips rallied on Tuesday, sending the Dow to its highest close in almost 19 months, after a drop in inflation and a surge in industrial production underscored a strongly rebounding economy and reassured investors interest rates would stay low for some time.
U.S. consumer prices took a surprise tumble last month, even as industrial output and groundbreaking for new homes surged, the government said Tuesday. Another report showed the shortfall in the U.S. current account, the broadest gauge of U.S. trade with the rest of the world, shrank more than expected in the third quarter.
Taken together, the data suggested the U.S. economy was stronger than most analysts had expected. Economists also said that with signs of inflation slowing, the Fed could keep interest rates at historically low levels for quite awhile.
``We're seeing a delayed reaction to good economic news from this morning,'' said John Caldwell, chief investment strategist at McDonald Financial Corp. in Cleveland.
``Housing starts were the strongest they have been in about 20 years, and industrial production showed a clear acceleration. We're looking at a stronger industrial economy next year,'' Caldwell said.
And ``the Consumer Price Index was down, which signals the Fed will stay on hold with interest rates,'' Caldwell said.
The Dow Jones industrial average ended up 106.74 points, or 1.06 percent, at 10,129.56, its highest close since May 23, 2002. The Standard & Poor's 500 Index added 7.09 points, or 0.66 percent, to 1,075.13, its highest finish since May 24, 2002. The technology-laced Nasdaq Composite Index rose 6.03 points, or 0.31 percent, to 1,924.29. |
