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September 20, 2010 in Business
Stocks extend rally ahead of Fed meeting
NEW YORK — Stocks extended their September rally into a fourth week today as investors hoped for more moves by the Federal Reserve to prop up the economy.
Buying accelerated after the Standard & Poor’s 500 index, the market measure most often used by professional traders, broke through the high end of its recent range. Technical analysts see that as a bullish sign for the market.
The Dow Jones industrial average jumped 146 points to its highest close since May. Buyers were also encouraged by an announcement from a group of economists declaring that the most recent recession ended in June 2009.
The Fed meets Tuesday to discuss interest rates, and investors are hoping for a sign that the central bank might make more moves to keep rates low. There is a growing expectation that the Fed’s rate-setting committee could relaunch programs to buy Treasurys and mortgage bonds in an effort to stimulate the economy. At the very least, it might hint at future plans.
“The Fed will hint at it, put it on the table, but not do anything,” said Brian Gendreau, a market strategist at Financial Network Investment Corp.
A number of economic indicators have topped forecasts in recent weeks, propelling stocks higher, but the economy is far from strong. If the Fed starts buying bonds again it could drive interest rates lower, enabling companies and consumers to get cheaper loans. The Fed had a similar bond-buying program in place earlier this year.
In corporate news, IBM Corp. said it would buy data storage provider Netezza Corp. for about $1.7 billion in cash. Investors see acquisitions as a sign companies are more comfortable spending their spare cash built up during the recession to expand their businesses.
According to preliminary calculations, the Dow Jones industrial average rose 145.77 points, or 1.4 percent, to close at 10,753.62.
The Standard & Poor’s 500 index rose 17.12, or 1.5 percent, to 1,142.71. The Nasdaq composite rose 40.22, or 1.7 percent, to 2,355.83.
The S&P 500 climbed solidly above the key technical level of 1,131, the high end of its recent trading range. The S&P briefly crossed that barrier on Friday for the first time since June 21, but not for long enough to convince analysts that the market had enough momentum to surge higher.
Many automatic buy and sell orders are set around market milestones such as these, and investors watch those levels closely for clues about which way the market may go next.
Five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 955 million shares.
© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Seven firms or nonprofits win Agora Awards 
liarsinnews on September 20 at 7:41 a.m.
Seems to me the Fed is going to help out the poor bankers again. Awwwwwww, those bonus checks?
madscientist on September 20 at 7:53 a.m.
plunger team at work.
bdr on September 20 at 11:14 a.m.
would you put your retirement on a yo-yo, money scale
expecting to retire on what ever you get when the string fouls up leaving the yo-yo at the bottom of the money scale?
would you?
This is why trillions have left the market forever.
soccermomsusie on September 20 at 12:39 p.m.
I am glad to see that America’s Greatest President’s (AGP) plan is finally starting to work. You know I am talking about Blessed W!
AGP-GWB’s tax cuts for our wealthier (God’s Plan) betters have finally taken effect and have begun to turn this economy around, no thanks to Socialist/Fascist/Dadaist/Communist/Surrealist Demoncrat Libertard cyborg president Barry O’Kenyan Obamatron.
Now the Muslim-in-Chief wants to do away with these tax credits aimed for the ones God has purposefully blessed the most. It is not only going to wreck the economy by making the wealthy pay what they paid during the Reagan Administration (Number Two behind Number One AGP-GWB), it is a blasphemous act - punishing those whom God favors the most.
People please honor George W. Bush by voting Republican in 2010. Yes, the tax cuts took a while, but today’s stock market gains prove that they are working.
And a word to my liberal democrat friends (God loves you as do I) please remember how Obama has disappointed you. He is a real “bummer” and “square,” man. Show him your mellow wrath by not voting in the upcoming election. Your time would be better spent playing the bongos and disinfecting your birkenstocks. Stay home and leave it to the tea-party-fueled GOP to restore honor, man. Dig? Please?
W again in 2010!
HEAR OUR VOICE!!!
madscientist on September 20 at 1:43 p.m.
soccermom, today’s “gains” have nothing to do with tax cuts implemented years ago. these “gains” will so be lost when the dow goes to 8500. What will you say then ??
soccermomsusie on September 20 at 3:46 p.m.
madscientist, if the dow goes to 8500, then it will be Socialist/Fascist/Dadaist/Communist/Surrealist Demoncrat Libertard cyborg president Barry O’Kenyan Obamatron’s fault. It will be God’s punishment for punishing those whom he wants to rule us. How are they punished? By paying more taxes.
For shame!
I ask you all to join me in prayer to keep the tax cuts for the wealthy/blessed/chosen-few. In this way we might keep God from punishing us.
HEAR OUR VOICE!!!