New York – Wall Street surged higher Tuesday, carrying the Dow Jones industrials to their second-best close ever as positive economic data further buoyed a growing sense of optimism among investors. The Dow closed 53 points from its record-high close.
Stocks, particularly blue chips, rose after the Conference Board said its consumer confidence index for September rose more than expected, reaching 104.5 from a revised reading of 100.2 in August. Analysts forecast the index would rise to 103.
Also bolstering investor enthusiasm was a report from the Federal Reserve Bank of Richmond, Va., that showed that the region’s economy strengthened this month. The bank’s manufacturing index came in at 9, versus 3 in August.
Jack Albin, chief investment officer with Harris Private Bank, said the market’s advance reflected widespread investor enthusiasm and a realization that the Federal Reserve might have room to ease short-term interest rates. He pointed to low inflation and the recent nearly 20 percent pullback in oil prices.
“The Fed has a lot more elbow room to lower rates. The Fed could maybe even lower this year,” he said.
The Dow gained 93.58, or 0.81 percent, to 11,669.39. The Dow’s advance put it within range of its high of 11,722.98 set in January 2000.
Broader stock indicators also jumped sharply. The Standard & Poor’s 500 index rose to a 5 1/2-year high, gaining 9.97, or 0.75 percent, to 1,336.34, and the Nasdaq composite index rose 12.27, or 0.55 percent, to 2,261.34.
Bonds fell after a sharp rally Monday in what was perhaps some profit-taking. The yield on the benchmark 10-year Treasury note rose to 4.59 percent from 4.55 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.
Light crude oil settled down 44 cents at $61.01 on the New York Mercantile Exchange.
