US stocks rally on Fed minutes, earnings news
By KEN SWEET
NEW YORK (AP) a¿¿ Once again, it was the Federal Reserve to the rescue for the stock market.
Major U.S. indexes rose broadly Wednesday, helped by a report out of the nation's central bank that showed Fed policymakers want to be absolutely certain the U.S. economy had recovered before starting to raise interest rates.
Confident that the Fed won't be raising rates until sometime next year, investors once again embraced some of the market's more risky names. Biotechnology and technology stocks, beaten down over the past week, were among the biggest gainers.Wednesday's trading had one broad theme: risk on. Investors sold utility and telecommunications stocks a¿¿ which are usually less volatile, rich-dividend companies a¿¿ and piled into areas that typically benefit from a growing economy: materials makers, industrial companies and technology stocks. The Dow Jones industrial average rose 181.04 points, or 1.1 percent, to 16,437.18. The Standard & Poor's 500 index jumped 20.22 points, or 1.1 percent, to 1,872.18 and the technology-heavy Nasdaq composite rose the most, up 70.91 points, or 1.7 percent, to 4,183.90. Facebook rose the most in the S&P 500, jumping 7.3 percent, followed closely by biotech company Vertex Pharmaceuticals, up 7 percent. Other names that saw renewed investor interest were biotech companies Boston Scientific, Biogen and Celgene and in technology, Priceline, Red Hat and ETrade. The Dow Jones Transportation Average jumped 1.6 percent. Investors closely watch the "Dow Transports," as the index is nicknamed, on the theory that a growing economy will mean companies will have to ship more products, increasing the profits of transportation companies like airlines, railroads and trucking companies. At their March policy meeting, Fed policymakers debated over when the bank should start raising interest rates. Traditionally the Fed's main policy tool for regulating the U.S. economy, short-term rates have been near zero since 2008 in an effort to encourage borrowing and economic growth, all of which is good for stocks.
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