Stocks set highs for 2010 after boost from the Fed
Friday, November 5, 2010
The Federal Reserve wanted to push interest rates lower and jumpstart financial markets with its $600 billion economic stimulus plan. So far the Fed is getting the results it wants.
Long-term interest rates sank and stocks indexes hit new highs Thursday, a day after the Fed announced its massive bond-buying plan. The Dow Jones industrial average soared more than 220 points, reaching another high for the year. All three main stock indexes have now reached 2010 highs this week.
After five straight days of gains, the Dow Jones industrial average returned to levels last seen in early September 2008, before the collapse of Lehman Brothers and the worst days of the financial crisis.
“Much of today’s gains comes as a result of the government pumping money into the market,” said Joe Kinahan, the chief derivatives strategist at TD Ameritrade.
The dollar fell against other currencies as traders anticipated lower U.S. interest rates because of the Fed’s bond-buying program. Crude oil, gold and other commodities rose.
The Dow rose 219 points, or 1.9 percent, to close at 11,434.84. The broader S&P 500 index rose 23.10 points, or 1.9 percent, to 1,221.06, and the technology-heavy Nasdaq composite gained 37 points, or 1.5 percent to 2,577.34.