- The Washington Times - Monday, October 23, 2006

NEW YORK (AP) — Wall Street extended its October rally yesterday as investors grew more confident about upcoming earnings reports and as a decline in oil bolstered hopes for higher consumer spending. The Dow Jones Industrial Average crossed 12,100 for the first time and reached a record high close.

Dow component Wal-Mart Stores Inc., which pleased investors by announcing plans to cut capital spending to improve profits, helped the blue chips to their new high.

Strength from International Business Machines Corp., Hasbro Inc., and Xerox Corp. also fed the advance. Just halfway through the third-quarter-earnings season, companies’ generally upbeat reports have given investors a renewed sense of security about the future.

Blue chips resumed a three-month rally yesterday after stalling Friday; the Dow had already risen 233 points in October before yesterday’s trading. The average, which crossed 12,000 just last week, reached a new trading high yesterday of 12,125.16.

The Dow rose 114.54, or 0.95 percent, to 12,116.91.

The Standard & Poor’s 500 Index rose 8.42, or 0.62 percent, to 1,377.02, and the Nasdaq Composite Index rose 13.26, or 0.57 percent, to 2,355.56.

The advance came despite some concerns about the Federal Reserve’s two-day meeting on interest rates, which starts today. Policy-makers are expected to leave interest rates unchanged, though they could sound a hawkish tone in their accompanying economic assessment because of recent signs of rising inflation.

Treasury bonds fell on speculation the Fed will keep its benchmark rate at 5.25 percent, which is still at its highest level in more than five years. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.83 percent form 4.79 percent on Friday.

The dollar was mixed against other major currencies, while gold prices fell.

The price of oil, which fell to lows for the year Friday from its mid-July highs, is making investors more bullish on sectors like retail, which will benefit if consumers have more spending money. Doubts that OPEC members would follow Saudi Arabia’s lead to curb output pushed a barrel of light sweet crude lower by 52 cents to $58.81 on the New York Mercantile Exchange.

“The picture being painted is pretty easy to suggest that the pressure on the economy from higher oil prices is easing,” said Richard E. Cripps, chief market strategist at Stifel Nicolaus.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide