Wall Street Extends Rally On Fed Stimulus Plan
NEW YORK (Reuters) - Commodity-related stocks led a rally in U.S. equities Friday, putting the S&P 500 on track for a fourth straight day of gains as investors cheered an aggressive plan by the Federal Reserve to stimulate the economy.
The Federal Reserve launched another stimulus program Thursday, its third quantitative easing measure, saying it would pump $40 billion into the U.S. economy each month until the jobs market showed sustained growth.
The Fed announcement lifted the benchmark S&P 500 index to its highest intraday level since January 2, 2008.
Big-cap giants Apple Inc
Retail sales rose 0.9 percent in August, advancing for a second straight month, boosted by automobiles and high gasoline prices, but the underlying tone pointed to modest economic growth in the third quarter.
"When you start to decompose the look of what happened in the retail number, people are going to start to back away a little bit; although the numbers weren't any surprise, they were pretty much on consensus," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago.
"It (also) adds a little bit of additional credibility and validity, if anybody needed it, for what (Fed Chairman Ben) Bernanke did yesterday."
Consumer prices rose 0.6 percent in August, the most in three years as the cost of gasoline jumped, but there was little sign of a pick-up in underlying inflation pressures.
The Dow Jones industrial average <.dji> gained 73.50 points, or 0.54 percent, to 13,613.36. The Standard & Poor's 500 Index <.spx> rose 9.31 points, or 0.64 percent, to 1,469.30. The Nasdaq Composite Index <.ixic> climbed 29.42 points, or 0.93 percent, to 3,185.24.
S&P Dow Jones Indices said UnitedHealth Group Inc
Industrial output fell 1.2 percent in August, the most in more than three years as production slowed in factories and a hurricane temporarily shut down oil and natural gas rigs in the Gulf of Mexico. Analysts polled by Reuters had expected industrial output to be flat last month.
The Fed announcement also pushed the dollar <.dxy> down 0.5 percent, boosting commodities by raising the allure of those priced in a weaker U.S. currency. Freeport-Mcmoran Copper & Gold Inc
The Thomson Reuters/University of Michigan's preliminary September consumer sentiment index rose to 79.2, its highest level in four months, as Americans were more upbeat about their economic and job prospects.
Lastly, U.S. business inventories increased 0.8 percent in July, the largest gain in six months in July.
(Editing by Bernadette Baum)
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