Upbeat Fed Beige Book sends stocks up

NEW YORK – Investors sent stocks moderately higher Wednesday after the market viewed a Federal Reserve report on the economy as a sign that the fed’s string of interest rate hikes might be near an end.

Wall Street was mired in a narrow trading range until mid-afternoon, when the feds released its Beige Book, a survey of the business climate around the country. The central bank said the job market improved and that inflation, a concern for the feds and the stock market, was fairly contained. Seven out of 12 districts reported their regional economies were growing or holding steady.

“It’s a more benign take than previous Beige Books,” said Robert Tipp, chief investment strategist for Prudential Investment Management fixed income. “It will presumably open their eyes (the feds’) to the fact that the economy could be cooling … and they won’t have to continue raising rates more than another two or three moves.”

The day’s other economic data were also strong: New home sales set a record in June and factory orders for big-ticket manufactured products rose at a strong clip. Analysts said investors were hearing the good economic news that they’ve been hoping for.

“The economic slowdown that was supposed to be happening at this time of year isn’t happening,” said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.

The Dow Jones industrial average rose 57.32, or 0.54 percent, to 10,637.09.

Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 5.63, or 0.46 percent, to 1,236.79, reaching another four-year high, and the Nasdaq composite index rose 10.23, or 0.47 percent, to 2,186.22.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.26 percent from 4.23 percent late Tuesday. The dollar was down against other major currencies. Gold prices were higher.

Crude oil futures fell. A barrel of light crude settled at $59.11, down 9 cents, on the New York Mercantile Exchange.