Dow Finishes Week at 11-Month High

Sunday, September 20, 2009

U.S. stocks rose for a second straight week, pushing the Dow Jones industrial average to an 11-month high, as increases in retail sales and industrial production signaled that the economy is recovering.

General Electric and Apple advanced as gains at factories and retailers topped economists' estimates. Dow Chemical led materials companies to the biggest rally among 10 industry groups as it said it reduced a bridge loan.

The Standard & Poor's 500-stock index rose 2.5 percent, to 1068.30. The Dow average added 214.79 points, or 2.2 percent, to 9820.2, its highest close since Oct. 6. The Nasdaq gained 2.5 percent, to 2132.86.

"Most investors have been skeptical of this rally since March," said Robert D. Stimpson, a money manager at Oak Associates in Akron, Ohio. "We're seeing renewed interest in owning stocks again."

Stocks responded to comments from Warren E. Buffett, the billionaire who runs Berkshire Hathaway, and Federal Reserve Chairman Ben S. Bernanke. Buffett, speaking at a conference in California, said Berkshire Hathaway is "buying stocks right as we speak." Bernanke said the worst U.S. recession since the 1930s has probably ended, but he warned that growth may not be strong enough to reduce the jobless rate very soon.

Yields on Treasury securities rose before next week's auctions of a record $112 billion of new notes. The benchmark 10-year note's yield climbed to 3.47 percent, from 3.34 percent.

The Treasury will auction $29 billion of three-month bills and $29 billion of six-month bills on Sept. 21. They yielded 0.09 percent and 0.2 percent, respectively, in when-issued trading. The Treasury will sell one-month bills and $43 billion of two-year notes the next day. Auctions of $40 billion of five-year notes and $29 billion of seven-year notes are scheduled for Sept. 23 and Sept. 24.

-- Bloomberg News

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