Sideways trading likely to continue

NEW YORK — Wall Street had its second straight late-session rally Wednesday, but the pattern of trading left market-watchers doubtful that the advance would hold ahead of a key Federal Reserve meeting and the hand-over of power in Iraq next week.

Investors have largely factored in the expected rise in interest rates and a shaky transition of power in Baghdad, so many analysts think the sideways trading of the past several weeks could continue even after those events have passed. But the late-day buying was still encouraging.

The idea that the “smart money” moves in at the end of the day is “an old line,” said Bill Groenveld, head trader for vFinance Investments. “But it gives me a warm feeling. … I think whenever more people decide to step up, it’ll be to the upside.”

The Dow Jones industrial average gained 84.50, or 0.8 percent, to finish at 10,479.57, in positive territory for the year for the first time since April 27.

The broader gauges also closed within a few points of their intraday highs. The Nasdaq composite index surged 26.83, or 1.4 percent, to 2,020.98. The Standard & Poor’s 500 index rose 9.65, or 0.8 percent, to 1,144.06.

Despite strong corporate earnings and robust economic growth, concern about rising interest rates, higher fuel prices and the situation in Iraq has paralyzed investors in recent weeks.