Wall Street rallies for third day as Fed concerns fade

2013 年 7 月 3 日5710

NEW YORK (Reuters) - U.S. stocks climbed for a third straight day on Thursday after comments from several Federal Reserve officials soothed concerns that the central bank would begin to reduce its stimulus efforts in the near future.

The Dow Jones industrial average closed back above 15,000 for the first time since June 19. The Dow scored its third consecutive day of triple-digit point gains for the first time since October 4-6, 2011.

The rally helped the S&P 500 post its best three-day run since January after three Fed policymakers sought to downplay the notion that the central bank would bring an imminent end to its accommodative monetary policy, known as quantitative easing.

"I think the Fed is trying to delicately prepare the markets for an eventual ending of QE3," said David Carter, chief investment officer of Lenox Wealth Advisors in New York.

"The Fed has bent over backwards to introduce this huge program over the past few years to get the economy going. The last thing the Fed wants to do is pull the plug too fast and have the economy go down the drain."

Thursday's advance was again broad-based. Nine of the 10 S&P 500 industry sectors gained, with financials, industrials and consumer discretionary shares leading the way. Stocks also got a lift from economic data showing a decline in weekly jobless claims and improvements in consumer spending and income.

Volatility erupted in the stock market after Fed Chairman Ben Bernanke said last week that the central bank could begin to reduce its $85 billion in monthly bond purchases later this year and end the program altogether by mid-2014 if economic conditions improve.

On Thursday, William Dudley, president of the Federal Reserve Bank of New York, said the Fed's asset purchases would be more aggressive than the timeline Bernanke had outlined if U.S. economic growth and the labor market prove weaker than expected.

Dudley stressed that slowing the pace of the Fed's bond buying would depend not on calendar dates but on the economic outlook, which remained unclear.

While the S&P 500 remains more than 3 percent below its all-time closing high of 1,669.16 reached on May 21, it has rallied 2.6 percent over the past three sessions after numerous Fed officials have sought to calm markets roiled by expectations of tighter monetary policy.

Volume was about average as some 6.3 billion shares changed hands on U.S. exchanges. More than 80 percent of stocks traded on the New York Stock Exchange advanced.

Atlanta Federal Reserve Bank President Dennis Lockhart echoed Dudley's comments, saying the pace of the Fed's purchases remained contingent on evolving economic conditions.

The Dow Jones Industrial Average rose 114.35 points or 0.77 percent, to end at 15,024.49. The S&P 500 gained 9.94 points or 0.62 percent, to finish at 1,613.20. The Nasdaq Composite added 25.64 points or 0.76 percent, to close at 3,401.86.

Hewlett-Packard was the Dow's best performer, advancing 3.2 percent to $24.77. Bank of America also ranked among the Dow's top gainers, adding 2 percent to $13.01.

A separate report showed consumer spending rose 0.3 percent last month while incomes grew 0.5 percent, the largest gain since February. Pending home sales rose 6.7 percent to their highest since December 2006.

ConAgra Foods Inc rose 5.1 percent to $35.04. The stock was the S&P 500's third-best performer after the food manufacturer reported a quarterly profit slightly above Wall Street's estimates and raised its long-term outlook.

Time Warner Cable jumped 4.4 percent to $108.22 as John Malone, chairman of Liberty Media, sounded out options for cable operator Charter Communications to acquire its larger rival, according to a Bloomberg report.

The SPDR Gold Trust ETF hit a 52-week low at $115.65 in the wake of gold's slide to its lowest level in almost three years. The price of gold dropped more than 2 percent to below $1,200 an ounce on Thursday, while the SPDR Gold Trust ETF lost 2 percent on heavy volume. With about 29 million shares traded, volume was more than double the daily average of 12.7 million over the past 50 days.

(Reporting by Alison Griswold; Editing by Kenneth Barry and Jan Paschal)

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