Wall Street climbs on Fed economic stimulus hopes

Dow Jones:11,559.95 (+20.70) Nasdaq:2,576.11 (+14) S&P 500:1,212.92 (+2.84)

US STOCKS rose yesterday, amid a 152-point swing in the Dow Jones Industrial Average, after the Federal Reserve said some policy makers wanted to take more action to stimulate the economy during their meeting this month.

Monster Worldwide, the provider of help-wanted ads, advanced 18 per cent, building on its 13 per cent rally during the past two days.

“You still have the Fed in your corner,” Mark Foster, who helps manage $500 million at Kirr Marbach in Columbus, Indiana, said.

“That gives you confidence in a market like this, especially after the volatility we’ve seen in the last few weeks, which was so unsettling,” he said.

The S&P 500 rose to the highest level since August 3rd after surging 7.7 per cent in six days.

When Fed policy makers met on August 9th, the S&P 500 had plunged 17 per cent since July 22nd, including a 6.7 per cent drop the previous day that was the biggest slump since 2008.

The Fed said those members, who were not identified, “felt that recent economic developments justified a more substantial move” beyond the pledge adopted at the August 9th meeting of the Federal Open Market Committee to hold its key interest rate at a record low until mid-2013.

“The message is that the Fed is here, they just won’t stop, they will keep their accommodative policy,” Don Wordell, a fund manager for Atlanta-based RidgeWorth Capital Management, said.

The S&P 500 slumped earlier after the Conference Board’s index of consumer confidence fell to 44.5, the lowest level since April 2009.

Caterpillar rose 2.4 per cent to $90.29.

Boeing gained 2.2 per cent to $66.02.

The KBW Bank Index of 24 stocks fell 0.7 per cent, snapping a two-day rally.

Bank of America fell 2.4 per cent as the Federal Deposit Insurance objected to the lender’s proposed $8.5 billion mortgage- bond settlement with investors.

The FDIC, the receiver for failed banks, owns securities covered by the settlement and said it does not have enough information to evaluate the accord, according to a filing in the federal court in Manhattan. – (Bloomberg)