By Kate Gibson
U.S. stocks rose Wednesday, with the Dow industrials extending
their longest winning run since December, amid ongoing cheer over
the Federal Reserve's decision to hold rates steady, which should
keep banks' borrowing costs at record lows for much of the
year.
"There's no question the Fed being easy continues to feed this.
Easy money is creating massive misallocations everywhere, and that
party can continue. As long as you have Ben the bartender manning
the tap, anything is possible," said Peter Boockvar, equity
strategist at Miller Tabak.
The Dow Jones Industrial Average (DJI) added 58.10 points, or
0.4%, to 10,745.08, with 23 of its 30 components moving higher.
The blue chips on Tuesday finished higher for a sixth straight
session, its longest stretch of gains since Dec. 28, 2009, and the
index's highest close since Jan. 19.
Trading at its highest level since October 2008, the S&P 500
Index (SPX) rose 7.47 points, or 0.6%, to 1,166.93. Energy and
financial shares paced sector gains among the index's 10 industry
groups.
Lincoln National Corp. (LNC) led financial gains after its
upgrade by Bank of America Merrill Lynch. .
Advancers beat decliners nearly 3 to 1 on the New York Stock
Exchange, where composite volume stood at 3.4 billion shares in
afternoon trade.
Year-to-date, daily volume in 2010 has averaged about 4.7
billion, still below last year's daily average of just under 5.5
billion. In 2009, the daily average came to 4.9 billion, according
to Boockvar of the tally that includes electronic and floor
trades.
"A lot of the short-term traders aren't participating because we
don't have the volatility," said Jeffrey Friedman, senior market
strategist at Lind-Waldock, who noted the CBOE Market Volatility
Index (VIX) is trading under 20, a scenario now in play for a third
week.
Hartford Financial Services Group (HIG) was among those
advancing after its late-Tuesday announcement that it would repay
$3.4 billion in government relief funds. .
The Nasdaq Composite Index (RIXF) climbed 13.28 points, or 0.6%,
to 2,391.29.
The dollar fell against the Japanese yen and rose against the
euro. .
Crude-oil futures closed at $82.93 a barrel and gold futures
also gained, finishing at $1,124.2 an ounce.
"Equities or raw materials like commodities, we're search for
risk, not safe haven," said Friedman.
An early report on prices at the wholesale level offered more
credence to thinking that the Federal Reserve should not have to
hike rates anytime soon to curb inflation.
The Labor Department's Producer Price Index declined 0.6% in
February, its largest drop in seven months. Taking out food and
energy costs, the index gained 0.1%. .
On Tuesday, stocks rose after the Fed's announcement that it
would keep its key rate for overnight loans between banks at
between zero and 0.25%. .
"Each FOMC meeting that keeps this language intact gives
investors 12 weeks of stability," said Marc Pado, U.S. market
strategist at Cantor Fitzgerald.
On Capitol Hill, Federal Reserve Chairman Ben Bernanke testified
Wednesday about efforts to reform banking regulation, telling
Congress the Fed's participation in the oversight of banks improves
its ability to carry out its monetary goals.
The push for reform stems in part from what began as trouble in
the housing market, with the ripple effect from that crisis still
in play. .
Shares of Blockbuster Inc. (BBI) fell 30% after the video-rent
chain said it might have to file for bankruptcy protection as it
struggles with debt after reporting a fourth-quarter loss of nearly
$435 million. .