Stocks extend their Fed-inspired rally
NEW YORK — U.S. stocks on Friday sealed a second week of gains as the Federal Reserve’s bond-buying program fueled demand for riskier assets including the euro and commodities.
“We had a fair amount of data out right on the heels of the Fed, but probably the biggest influence (Friday) is still the after-effects of the Fed’s announcement” on Thursday, said Jim Baird, chief investment strategist at Plante Moran Financial Advisors.
The dollar fell, oil prices neared $100 a barrel and Treasurys declined as the plan by Fed Chairman Ben Bernanke and his U.S. central bank colleagues spurred investor demand for riskier assets.
Stocks have been climbing recently, rallying around 4 percent in the past two weeks. “A good amount of this move was the fact that Europe has moved away from its Lehman moment,” said Bill Stone, chief investment strategist at PNC Wealth Management.
Scaling back from a 113-point climb, the Dow Jones industrial average gained 53.51 points, or 0.4 percent, to 13,593.37, the highest close since Dec. 10, 2007. It gained 2.2 percent on the week, tallying gains for eight of the past 10 weeks.
Bank of America Corp. rose 1.6 percent on the day and was up 8.5 percent this week, bolstered by the Fed’s decision Thursday to expand its long-term securities holdings with unlimited monthly purchases of $40 billion of mortgage debt.
“What (European Central Bank President Mario) Draghi is doing in Europe and what Bernanke is doing here is good news. They’ve effectively said that too little, too late is the most regrettable lament in the lexicon of central banking,” said Hugh Johnson, chairman of Hugh Johnson Advisors LLC.
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