U.S. Stocks Rise on Fed Speculation
U.S. stocks rose, pushing the Standard & Poor’s 500 Index up the most in a week, as investors speculated the Federal Reserve will act to spur the economy and the government’s list of “problem” banks declined for the first time since 2006.
Monsanto Co. (MON), Chevron Corp. (CVX) and Microsoft Corp. (MSFT) added at least 3 percent, pacing gains in companies most-tied to the economy. The Morgan Stanley Cyclical Index climbed 2.2 percent, breaking a five-day losing streak. Financial shares in the S&P 500 reversed losses, rising 2.4 percent, after the Federal Deposit Insurance Corp.’s list of troubled banks fell as the cost for bad loans eased. Bank of America Corp. (BAC) pared its loss to 2.3 percent from 6.4 percent. Swaps to protect against a default by the bank rose to a record.
The S&P 500 rose 3.3 percent to 1,160.55 at 3:11 p.m. in New York. All 10 industries rose, with gains ranging between 0.9 percent and 3.8 percent. The Dow Jones Industrial Average added 310.80 points, or 2.9 percent, to 11,165.45.
“The reason for the rebound today might be in the bad economic data that we saw earlier this morning,” Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., which oversees about $355 billion, said in a telephone interview. “What investors are reading is that the Fed has got to do something.”
Stocks briefly pared gains after a 5.9-magnitude earthquake in Virginia shook Washington and New York. More than 66 million shares changed hands on U.S. exchanges at 1:55 p.m. New York time following the earthquake in Virginia, more than any minute since just after the market opened at 9:30 a.m.
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