Stocks soar on hopes of Fed aid
US stocks have staged one of their strongest rallies of the year, wiping out a big decline from the day before, after a Federal Reserve official said he supported more measures to stimulate the economy.The Dow Jones industrial average shot up 162 points to close at 12,573.80, and every major category of stock in the US market closed higher.
Charles Evans, president of the Fed's Chicago bank, told Bloomberg News that he supported action to produce faster job growth, including having the Fed commit to super-low interest rates until unemployment falls significantly.
Last week, Fed Chairman Ben Bernanke told a committee of Congress that he was ready to act if the economy needs it, but he laid out no immediate steps.
Investors have been worried about an escalating crisis in Europe over government debt and the health of banks, and job growth in the United States has been slower over the past three months than it was earlier in the year.
Rob Lutts, president and chief investment officer of Cabot Money Management, said investors were looking for an excuse to buy: "The question for Bernanke is should he add more medicine when he's already doped up the patient enough already."
Materials companies, industrial companies and banks rose the most, but each of the 10 major categories of stock in the Standard & Poor's 500 climbed. Energy stocks also had an impressive day after the price of oil rose from an eight-month low.
The Standard & Poor's 500 index gained 15.25 points to 1,324.18, and the Nasdaq composite rose 33.34 to 2,843.07.
Investors sold US government debt, an indication that they were willing to move money into riskier assets. The yield on the benchmark 10-year US Treasury note climbed 0.08 percentage point to 1.67%.
Rob Lutts, president and chief investment officer of Cabot Money Management, said investors were looking for an excuse to buy: "The question for Bernanke is should he add more medicine when he's already doped up the patient enough already."
Materials companies, industrial companies and banks rose the most, but each of the 10 major categories of stock in the Standard & Poor's 500 climbed. Energy stocks also had an impressive day after the price of oil rose from an eight-month low.
The Standard & Poor's 500 index gained 15.25 points to 1,324.18, and the Nasdaq composite rose 33.34 to 2,843.07.
Investors sold US government debt, an indication that they were willing to move money into riskier assets. The yield on the benchmark 10-year US Treasury note climbed 0.08 percentage point to 1.67%.
© 2013 Press Association