Dow Surpasses Pre-Lehman Levels
The Wall Street Journal reports:
NEW YORK—Stocks rallied Thursday to their highest level since September 2008 as investors applauded the Federal Reserve's latest effort to stimulate the struggling economy.
The Dow Jones Industrial Average closed up 219.71 points, or 1.96%, to 11434.84, its highest closing level since just before Lehman Brothers Holdings Inc. collapsed.
Dow components Bank of America, J.P. Morgan Chase and Caterpillar propelled blue chips to their fifth gain in a rowand biggest climb since Sept. 1.
The Standard & Poor's 500-stock index rose 23.10 points, or 1.93%, to 1221.06. Financials were the strongest sector after The Wall Street Journal reported that the Federal Reserve is expected to allow healthy banks with strong capital levels to raise their dividends.
The Nasdaq Composite gained 37.07 points, or 1.46%, to 2577.34. The technology-heavy index closed at its highest level since January 2008. It has risen in 18 of the last 21 sessions.
Investors pushed stocks higher as they digested the Fed's plans, announced on Wednesday, to purchase an additional $600 billion of longer-term Treasury securities by June in a second round of quantitative easing, dubbed QE2. The central bank also will keep reinvesting principal payments from its securities holdings.
"I'm a little surprised that there wasn't a 'sell the news' reaction, but people are clearly relieved at the size of the quantitative easing package," said Ben Halliburton, chief investment officer at Tradition Capital Management.
On the employment front, initial jobless claims posted a bigger-than-expected jump, suggesting continued weakness in the labor market as investors gear up for the October nonfarm payrolls report, due Friday morning.
