Stocks spent most of Thursday morning little changed, but moved steadily higher after investors had a chance to work through the minutes from the Fed's September policy meeting.
Dow Closes Up 138, Nasdaq Climbs 20
NEW YORK (AP) — Signs that the Federal Reserve would keep interest rates low for several more months pushed stocks broadly higher on Thursday, adding to what has been a near eight-day rally. Energy stocks advanced with the price of oil.
The Dow Jones industrial average rose 138.46 points, or 0.8 percent, to 17,050.75. The Standard & Poor’s 500 index rose 17.60 points, or 0.9 percent, to 2,013.43 and Nasdaq composite rose 19.64 points, or 0.4 percent, to 4,810.79.
The S&P 500 has risen seven out of the last eight sessions and is now above 2,000, a psychological milestone, for the first time since mid-August.
Stocks spent most of the morning little changed, but moved steadily higher after investors had a chance to work through the minutes from the Fed’s September policy meeting.
In the minutes, Fed officials expressed confidence that the U.S. economy was improving, citing the improving job market. But policymakers had concerns that inflation continues to remain abnormally low, noting the recent drop in commodity prices, which were a major reason why the Fed did not raise interest rates.
The Fed has kept interest rates near zero for nearly seven years now. The Fed has repeatedly signaled it wants to raise interest rates, but it has held off on doing so.
“The Federal Reserve is waiting for the ideal time to raise rates. But, for those who live in the real world, we know that there is not a ‘perfect’ time to raise interest rates,” said David Libovitz, global market strategist at JPMorgan Funds.
Scott Clemons, chief investment strategist for Brown Brothers Harriman’s wealth management business, said investors no longer expect rates to go up this year, even though Chair Janet Yellen has said that’s likely to happen. He added that the central bank is “beginning to falter” in communicating to investors what its plans are.
“The market has begun to conclude that they’re the boy who cried wolf” where raising interest rates are concerned, Clemons said.
The price of oil rose Thursday as the dollar weakened, making oil more attractive to overseas buyers, and on concerns that Russia’s military actions in Syria raised the threat of a wider conflict in the region.
Energy stocks were among the biggest gainers on Thursday, following oil higher. Marathon Oil rose 5 percent, Occidental Petroleum was up 3 percent and Hess Corp. added 4 percent.
Benchmark U.S. oil rose $1.62, or 3.4 percent, at $49.43 a barrel in New York. Brent Crude, which is used to price international oils, gained $1.72, or 3.4 percent, to $53.05 a barrel in London.
In other futures trading on the New York Mercantile Exchange, wholesale gasoline rose 1.8 cents to close at $1.408 a gallon. Heating oil rose 2.2 cents to close at $1.602 a gallon and natural gas rose 2.4 cents to close at $2.498 per 1,000 cubic feet.
Netflix had a strong day as well, rising $6.83, or 6 percent, to $114.93. The streaming movie and TV show company announced it was increasing prices on its most popular plan to cover the higher costs for its new original shows and series.
With stocks posting solid advances, investors sold bonds, pushing yields higher. The yield on the 10-year Treasury note rose to 2.10 percent from 2.07 percent late Wednesday. The euro rose to $1.1274 while the dollar was little changed at 119.94 yen.
Precious and industrial metals futures ended lower. Gold lost $4.40 to $1,144.30 an ounce, silver fell 33 cents to $15.77 an ounce and copper declined two cents to $2.34 a pound.