U S STOCKS rose by the most in nearly two weeks yesterday, after data showed business investment and the housing recovery continued apace, reassuring investors worried about the Fed’s plans to reduce its massive monetary stimulus.
The Dow Jones industrial average rose 100.75 points or 0.69 per cent, to 14,760.31, the S&P 500 gained 14.94 points or 0.95 per cent, to 1,588.03 and the Nasdaq Composite added 27.13 points or 0.82 per cent, to close at 3,347.89.
Analysts said the gains were fueled by a mix of buyers. Hedge funds and retail clients of varied wealth were attracted by the market’s recent drop. Position trimming by institutions due to recent volatility pulled the market back from its highs in the final minutes of trading.
The gains came even as the latest drop in bond prices indicated higher interest rates. A lightly bid two-year government debt auction disappointed bond traders who were looking for bargain-minded investors to buy Treasuries hard hit in the recent market selloff.
Mike Binger of Gradient Investments LLC, said: “I think investors have kind of come to the conclusion that ‘OK, we’ve made a kneejerk reaction to what the Fed has said and now we’ve taken some deep breaths and we can reassess”.
The S&P 500’s gain of just under one per cent was the biggest since 13 June and was the market’s most broad-based advance since Fed Chairman Ben Bernanke sparked a global rout in financial markets by laying out a roadmap for the end of $85bn (£55.1bn) a month in bond purchases.
New York Report