Calm Over Interest Rates Keeps Dow Going Strong
Associated Press
Friday, February 16, 2007; Page D05
NEW YORK, Feb. 15 -- Wall Street extended its February rally Thursday, growing confident that interest rates would hold steady even as Federal Reserve Chairman Ben S. Bernanke tempered his forecast of slowly cooling growth and inflation with a reminder that price pressures remain a concern.
The Dow Jones industrial average rose 23.15, or 0.18 percent, to a record close of 12,765.01, after reaching a new trading high of 12,779.03. The Dow stretched its three-day advance to more than 200 points, the first such jump since mid-August, and had its second consecutive record high close, triggered by signs of an uptick in mergers and acquisitions.
The Standard & Poor's 500-stock index rose 1.51, or 0.10 percent, to 1456.81. The Nasdaq composite index rose 8.72, or 0.35 percent, to 2497.10.
Takeover talk coupled with Bernanke's testimony to Congress have helped send stocks soaring. Bernanke's comments Thursday were similar to those he made a day earlier, but he added that inflation could once again pick up, which reminded investors that a rate increase is not out of the question. That note of caution limited the market's climb.
The prospect of higher rates looked dim, however, after most of the economic reports released Thursday. The reports showed a jump in jobless claims last week, a drop in industrial output in January because of large cutbacks and layoffs in the auto industry, and weaker-than-expected manufacturing in the Philadelphia area.
"The Fed is still data-driven, so we will be looking at the data in the ensuing months," said Jim Herrick, manager of equity trading at Baird & Co. "There's a strong possibility we'll continue this uptrend."
Movers
Anheuser-Busch rose $1.52, to $51.75, after holding preliminary merger talks with InBev.
Caterpillar rose $1.46, to $67.62. It plans to buy back $7.5 billion in stock over five years.
Boeing rose $1.77, to $91.71, after completing an order from UPS worth $3.6 billion.
Vonage Holdings fell 54 cents, to $5.30, after posting a fourth-quarter loss.
Biogen Idec fell $2.49, to $48, after fourth-quarter profit was less than analysts' expectations.
