Markets
Cheered by the Fed's Inflation Stance, Investors Push Dow to Another New High
Associated Press
Thursday, November 16, 2006; Page D06
NEW YORK, Nov. 15 -- Wall Street rallied again Wednesday, with the Dow Jones industrials scoring another record close as investors grew more confident that the Federal Reserve had inflation in hand. An $8 billion bid from US Airways for Delta Air Lines added to the market's momentum.
The Dow rose 33.70, or 0.28 percent, to 12,251.71, eclipsing the high set Tuesday. Broader stock indicators also gained. The Standard & Poor's 500-stock index advanced 3.35, or 0.24 percent, to 1396.57 and during the session passed the 1,400 mark for the first time since 2000. The Nasdaq composite index rose 12.09, or 0.5 percent, to 2442.75, its highest level in nearly six years.
Minutes from the Fed's Oct. 24-25 meeting showed that the central bank's governors remain worried more about inflation than the risk of the economy slowing too quickly under higher interest rates.
Investors seemed to buy the notion that the Fed had struck a balance between taming inflation and keeping the economy from falling into recession.
Investors also cheered the possibility of consolidation in the airline industry and remained upbeat after sharp gains Tuesday.
The proposed US Airways deal comes as many airlines are struggling to find profits despite a rebound in air travel from earlier in the decade.
Delta, which is operating under bankruptcy protection, has said it isn't interested in a merger.
The airlines' gains sent the Dow Jones transportation average soaring 65.70, or 1.38 percent, to 4,830.43.
Bonds fell sharply, with the yield on the benchmark 10-year Treasury note rising to 4.62 percent from 4.57 percent late Tuesday.
Movers
US Airways rose $8.57, to $59.50, as investors saw possible cost savings in the carrier's bid for Delta Air Lines.
Continental Airlines gained $4.72, to $43.08, helped by the prospect of industry consolidation.
Embrex surged $4.72, to $16.64. The animal vaccine maker agreed to be bought by Pfizer.
BellSouth slid 56 cents, to $42.36.
RailAmerica gained $3.44, to $15.82, on news that it agreed to be bought by a hedge fund.
