The News Courier in Athens, Alabama

State and Nation

July 11, 2013

Stocks surge after Bernanke allays stimulus fear

NEW YORK (AP) — Call it the Bernanke Boost.

The stock market, which has been marching higher for a week, got extra fuel Thursday after the Federal Reserve chairman said the central bank will keep supporting the economy.

The Dow Jones industrial average and Standard & Poor's 500 surged past all-time highs. Gold rose. And the yield on the 10-year Treasury note continued a pullback. Stocks that benefit most from a continuation of ultra-low interest rates, such as homebuilders, notched some of the biggest gains.

Ben Bernanke made the comments in a speech late Wednesday after U.S. markets had closed, saying the economy still needs "a highly accommodative monetary policy for the foreseeable future."

Bernanke said the U.S. economy needs help because unemployment is high. The remarks seemed to ease investors' fears that the central bank will pull back on its economic stimulus too quickly.

Stock index futures rose overnight and the market surged at the open Thursday.

"It's back to the old accommodative Fed, so the markets are happy again," said Randy Frederick, Managing Director of Active Trading and Derivatives at the Schwab Center for Financial Research.

The S&P 500 index jumped as high as 1,671 in early trading, above its record close of 1,669 from May 21. The index was up 17 points, or 1.03 percent, at 1,669 as of 1:02 p.m. Eastern Daylight Time.

The index is on track for its sixth straight day of gains, its longest streak in four months.

The Dow rose 135 points, or 0.9 percent, to 15,427, above its own all-time closing high of 15,409 set May 28.

The Nasdaq composite rose 47 points, or 1.3 percent, to 3,567. The Nasdaq is at its highest since October 2000. It remains well below the all-time high of 5,048 it reached March 10, 2000.

In government bond trading, the yield on the 10-year note fell to 2.60 percent from 2.63 percent Wednesday. The yield has dropped this week. It surged as high as 2.74 percent Friday after the government reported strong hiring in June. Many traders took the report as a signal that the Fed would be more likely to slow its bond purchases sooner rather than later.

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