Modest gains extend Wall Street rally
NEW YORK – Wall Street extended its rally with modest gains in the major indexes following two days of sharp advances, despite economic readings that painted a mixed picture of the economy.
Though the indexes rose, declining issues narrowly outpaced advancers on the New York Stock Exchange.
On Tuesday and Wednesday, the market had posted its biggest two-day rally in five years. Hopes have been growing that financial companies may be recovering from the credit crisis and that the Federal Reserve may lower interest rates to calm the markets.
The market’s anticipation of a rate cut follows comments from a Fed official Wednesday and comes ahead of a speech by Fed Chairman Ben Bernanke scheduled for Thursday evening.
Oil prices spiked early Thursday then fell back somewhat after a fire at an Enbridge Energy pipeline carrying crude from Canada to the Midwest.
The oil price recovery gave some strength to energy stocks. Meanwhile, financial companies, which had shown gains Wednesday, retreated as did retailers following a weak showing by Sears Holdings Corp.
Aside from a reading on third-quarter growth, economic news didn’t offer investors much reason to cheer.
“The data’s weak, and says to us that the Fed needs to stay engaged here,” said Phil Orlando, chief equity market strategist at Federated Investors.
The Dow Jones industrial average rose 22.28, or 0.17 percent, to 13,311.73.
Broader stock indicators also rose. The Standard & Poor’s 500 index edged up 0.70, or 0.05 percent, to 1,469.72, and the Nasdaq composite index rose 5.22, or 0.20 percent, to 2,668.13.
Declining issues outnumbered advancers by about 9 to 7 on the New York Stock Exchange, where volume came to 1.33 billion shares compared with 1.30 billion traded Wednesday.
Bond prices rose, with the yield on the benchmark 10-year Treasury note falling to 3.94 percent from 4.05 percent late Wednesday. Bond prices and yields move in opposite directions. The dollar rose against other major currencies, while gold prices fell.
Light, sweet crude for January delivery rose 39 cents to settle at $91.01 a barrel in choppy trading on the New York Mercantile Exchange. Energy companies gained. Exxon Mobil Corp. rose 67 cents to $88.59, while ConocoPhillips rose $1.10 to $78.82.
Overseas stock markets rose. Britain’s FTSE 100 rose 0.68 percent; Germany’s DAX index advanced 0.54 percent and France’s CAC-40 rose 0.66 percent. In Asia, Japan’s Nikkei stock average closed up 2.38 percent. Hong Kong’s Hang Seng index rose 4.06 percent.