Wall Street gains as Fed says economy stabilizing

Wall Street gains as Fed says economy stabilizing
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First Published: Thu, Aug 13 2009. 08 42 AM IST
Updated: Thu, Aug 13 2009. 08 42 AM IST
New York: US stocks powered higher on Wednesday as the Federal Reserve said it saw signs of a more stable economy.
Stocks had been on track to close at their highest level in 10 months, led by technology and financials, but shares lost steam in the last half hour of trading.
The Federal Reserve said the economy was leveling out, and it left interest rates unchanged at the end of its two-day policy meeting.
The Fed also said it will extend the duration but not the size of a program to buy long-term government debt, which is part of its effort to revive credit and stimulate the economy.
“The Fed admitted the economy is getting better, but not so much better we’re going to be terminating all of our programs, which is what everybody was afraid of,” said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com in Shrewsbury, New Jersey.
Financials was the top-performing sector on the S&P 500, up 2%, after a 3.5% slide on Tuesday. Allstate Corp rose 6.3% to $28.42 after Bank of America-Merrill Lynch upgraded the insurer to “buy” from “neutral.”
The Dow Jones industrial average gained 120.16 points, or 1.30%, to close at 9,361.61. The Standard & Poor’s 500 Index rose 11.46 points, or 1.15%, to 1,005.81. The Nasdaq Composite Index added 28.99 points, or 1.47%, to 1,998.72.
The S&P is up 48.7% from its more than 12-year closing low set on 9 March.
Shares of Applied Materials rose 3.3% to $13.66 after the maker of chip equipment said it would at least break even this year thanks to new orders and deep cost cuts. The PHLX semiconductor index gained 1.8%.
Shares of luxury home builder Toll Brothers soared 14.4% to $23.42 after it said its net signed contracts rose in the third quarter, the first increase in four years. The Dow Jones home construction index jumped 5%.
Shares of Macy’s Inc rose 6% to $16.40 after the department store operator posted better-than-expected earnings and raising its outlook.
Volume was low on the New York Stock Exchange, with 1.23 billion shares changing hands, below last year’s estimated daily average of 1.49 billion. On the Nasdaq about 2.18 billion shares traded, below last year’s daily average of 2.28 billion.
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First Published: Thu, Aug 13 2009. 08 42 AM IST
More Topics: Markets | US | Stocks | Wall Street | S&P |