NEW YORK (AP) – Investors sent stocks climbing again following reassuring words from the Federal Reserve and another batch of upbeat earnings reports.
According to preliminary calculations, the Dow rose 53.28, or 0.5 percent, to 11,045.27. The Standard & Poor’s 500 index rose 7.65, or 0.7 percent, to 1,191.36, while the Nasdaq composite index rose 0.26, or 0.01 percent, to 2,471.73.
The Dow Jones industrials rose 53 points Wednesday, making back a quarter of the 213 they lost the previous day.
Investors were able to shake off Standard & Poor’s downgrade of Spain’s debt, the third European country in two days to have its rating lowered. Instead, they focused on the domestic economy.
In an economic assessment statement that accompanied the Fed’s decision to keep interest rates stable, the central bank said the labor market is “beginning to improve” and it noted that housing starts have “edged up.” The statement, which came at the end of a two-day policymaking meeting, did say that employers are still reluctant to hire, but that came as no surprise to investors.
The Fed said it expects to keep rates low for an “extended period” to help strengthen the economy.
“The Fed essentially kicked the can down the road,” said Burt White, chief investment officer at LPL Financial in Boston. Eventually the Fed will have to raise rates, but that might not happen now until early in 2011, White said.
The Fed’s view on the economy is actually more conservative than data suggests, White said. That’s because it is concerned about European debt problems, White added, noting that a slowdown in Europe’s economy could slow US exports and affect the domestic recovery.
About four stocks rose for every three that fell on the New York Stock Exchange, where volume came to 771.8 million shares, compared with 886 million shares traded at the same time on Tuesday.
Bond prices dipped after surging higher a day earlier. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.75 percent from 3.69 percent late Tuesday.