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Market rises: less on Fed chatter, more on economy

Published on NewsOK Modified: June 25, 2013 at 5:49 pm •  Published: June 25, 2013
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NEW YORK (AP) — Wall Street got back to focusing on the economy instead of the Federal Reserve on Tuesday, sending stocks higher.

Four reports showed a brightening U.S. economy. Housing and manufacturing continued to improve, and consumer confidence hit its highest level in 5 1/2 years.

The major U.S. stock indexes closed higher. The Dow Jones industrial average shot up 100.75 points, or 0.7 percent, to 14,760.31. The Standard & Poor's index rose 14.94 points, or 1 percent, to 1,588.03. The Nasdaq composite climbed 27 points, 0.8 percent, to 3,347.89.

The triple-digit rise in the Dow continues a bout of market volatility caused by investors and traders who are worried about the Fed ending its economic stimulus. Last Wednesday, Fed Chairman Ben Bernanke said he expects the Fed to end its bond buying by the middle of 2014 if it feels the economy can manage without that stimulus.

The Dow then plunged by triple digits on three of the next four trading days, with investors worried that the market would struggle without the Fed propping it up.

Some investors concluded that the recent sell-offs were overblown.

"This is the day where the dust appears to be settling," said Jonathan Lewis, chief investment officer at Samson Capital Advisors in New York.

Quincy Krosby, a market strategist at Prudential Financial, guessed that shorter-term traders bought stocks Tuesday because they judged that parts of the market were "oversold."

Among the biggest gainers were big dividend payers like phone and power companies. These are stocks that have been hit the hardest by the recent sell-off.

Long-term investors were likely still sitting on the sidelines, waiting for further signs that markets are becoming less volatile, Krosby said.

The stronger economic news for the U.S. led investors to sell U.S. government bonds, a sign that they're more comfortable putting money in stocks. The yield on the 10-year Treasury note, a benchmark for many types of loans, rose to 2.6 percent from 2.54 percent late Monday.

The big economic reports Tuesday revealed.

—Orders for durable goods rose 3.6 percent in May, matching April's gain. The gauge is important because U.S. manufacturing has generally struggled this year as demand for American exports slows in other parts of the world.

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