Closing Bell: Dow Sets New Record Thanks to Optimism on Fed Stimulus

×
Wall Street (Trader Michael Zicchinolfi, right, works on the floor of the New York Stock Exchange, Friday, Oct. 25, 2013. Earnin
Richard Drew/AP

By STEVE ROTHWELL

NEW YORK -- Investors drove the Dow Jones industrial average to an all-time high Tuesday on expectations that the Federal Reserve will keep its economic stimulus program in place.

The Dow (^DJI) rose 111.42 points, or 0.7 percent, to 15,680.35. The Dow also got a big boost from IBM, which announced that it would but $15 billion more of its own stock.

The Fed is in the middle of a two-day policy meeting at which it's expected to maintain its $85 billion worth of bond purchases every month. That program is aimed at stimulating economic growth by keeping borrowing rates very low. The Fed will announce its decision Wednesday afternoon.

"The expectation that the Fed remains clearly on hold is the catalyst for this march higher," said Quincy Krosby, a market strategist at Prudential Financial.

IBM (IBM) rose $4.77, or 2.7 percent, to $181.12, accounting for about a quarter of the Dow's gain.

The Standard and Poor's 500 index (^GPSC) rose 9.84 points, or 0.6 percent, to 1,771.95, its seventh record high this month.

About half the companies in the S&P 500 have reported earnings for the third quarter. So far, most are doing better than investors expected. Companies in the index are forecast to log third-quarter earnings growth of 4.5 percent, according to data from S&P Capital IQ.

The Nasdaq composite (^IXIC) rose 12.21 points, or 0.3 percent, to 3,952.34.

The Nasdaq Stock Market was hit with another glitch. Nasdaq indexes weren't updated from 11:53 a.m. to 12:37 p.m. because of a technical problem that was caused by human error, the exchange operator said in a statement. Trading of Nasdaq-listed stocks wasn't affected.

On Sept. 4, the Nasdaq had a brief outage in one of its quote dissemination channels, but trading wasn't disrupted. On Aug. 22 the exchange suffered a three-hour trading outage that was also attributed to problems with the exchange's price disseminating system.

Two economic reports came in relatively weak, which may have encouraged some investors by suggesting that any slowdown in the Fed's stimulus could be a ways off.

Retail sales fell 0.1 percent in September, the weakest showing since March, as auto sales dipped. Americans' confidence in the economy fell this month to the lowest level since April. People were worried about the impact of the 16-day partial shutdown of the U.S. government.

"The data that has been the most attractive to [stock] markets seems to be the data that maintains the status quo," said Brad Sorensen, the director of market and sector analysis at the Schwab Center for Financial Research.

The yield on the 10-year Treasury note fell to 2.50 percent from 2.52 percent Monday.

In commodities trading, oil fell 48 cents, or 0.5 percent, to $98.20 a barrel. Gold dropped $6.70, or 0.5 percent, to $1,345.50 an ounce.

What to Watch Wednesday:
  • Payroll processor ADP releases its employment survey for October at 8:15 a.m. Eastern time
  • The Labor Department releases Consumer Price Index for September at 8:30 a.m.
  • Federal Reserve policymakers conclude their two-day meeting to set interest rates.
These major companies are due to report corporate quarterly earrings:
  • Chrysler (not publicly traded)
  • Comcast (CMCSA, CMCSK)
  • Facebook (FB)
  • General Motors (GM)
  • Kraft Foods (KRFT)
  • Marriott International (MAR)
  • Sprint (S)
  • Starbucks (SBUX)
  • Visa (V)

Increase your money and finance knowledge from home

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

Investing in Emerging Markets

Learn to invest in a globalized world.

View Course »

Add a Comment

*0 / 3000 Character Maximum

27 Comments

Filter by:
Michael

Obama's Fed will continue to burn up money in an ongoing plan to delay the Lehman type collapse that we have already seen. This will continue until the mid-terms to see if the democrats can buy that election too. Not far off though, and the administration and insiders know, the markets will drop to levels that reflect the real world economy, not the fraudulently presented one we here reported by governments and the liberal press. If Obama is successful, he will not only have transformed this country into a nation of sheep receiving handouts, he will place himself permanently as the nations first dictator and chief.

October 31 2013 at 9:01 AM Report abuse rate up rate down Reply
jfsusn

I'll be pleased to take all the money the Federal Reserve prints. Maybe I'll find a use for it supporting Democrats taking over all three branches!

October 30 2013 at 6:39 PM Report abuse rate up rate down Reply
jfsusn

The republicans really stepped in it with their crazy cost-cutting (recovery-blasting) moves and their practically treasonable government shutdowns. No wonder consumer confidence is at submarine depths and the economy slumping . Kind of reminds one of their same treatment of FDR during the great depression (to say nothing of their anti FDR treatment during the dark hours of WWII and their fighting of Social Security , Medicare an d now Obamacare) Oh well! Thank goodness they saved us from Socialism! JFSUSN

October 30 2013 at 6:32 PM Report abuse rate up rate down Reply
k4jlp

WOW!
Crude fell a whole 48 cents/barrel, down to 98 bucks. The market correct price should be 45 bucks/barrel. I'm sure the hedge fund managers across the globe will dump their futures and short quick. The spotlight will shine bright soon on the Commodities Market and the "players". Get your sunglasses......

October 30 2013 at 7:23 AM Report abuse rate up rate down Reply
toosmart4u

If you do not like the printing of the money you must remember the chairman of the federal reserve is a bush jr. appointee and soon his term of service will be over and President Obama will appoint his own person.

October 30 2013 at 1:15 AM Report abuse -1 rate up rate down Reply
ineeda.break

When they quit printing money it not be good.

October 30 2013 at 12:24 AM Report abuse rate up rate down Reply
krs

As long as interest rates remain low investors will funnel more money into
the Stock Market. Why invest in Bonds and Notes when the interest rate is LESS than
the inflation rate. The DJ does not reflect how bad the economy is.

October 29 2013 at 10:48 PM Report abuse +1 rate up rate down Reply
TONY

More B S numbers inflating the Dow on what ifs and sooner or later it is gonna come crashing down all around them .

October 29 2013 at 10:27 PM Report abuse +5 rate up rate down Reply
scottee

what is being stimulated? besides the banks? with taxpayer money.
banks need to be accountable to the customer..not the government....

October 29 2013 at 10:26 PM Report abuse +7 rate up rate down Reply
betty_brock

Liberals are cock-eyed optimists.

October 29 2013 at 9:57 PM Report abuse -8 rate up rate down Reply