The stock market today finally staged the strong rally that Wall Street cheerleaders have been rooting for.
Reassured by the Federal Reserve that the nation's economy was not knocked off track by hurricanes Rita and Katrina, traders drove the Dow Jones industrial average to its biggest gain in six weeks.
The Dow closed up 129 points at 10,414.13, while the Nasdaq Stock Market composite index jumped 35 points to 2,091.24 and the Standard & Poor's 500 stock index climbed nearly 18 points to 1,195.76.
In the assessment of economic conditions that it issues eight times a year, the Fed reported "moderate or gradual" growth in most parts of the country.
The latest Fed survey carries a lot of weight with Wall Street because it is the first economic report to fully reflect the impact and aftermath of the hurricanes. Other September economic data--including the recent inflation reports--are based on reports taken in the midst of the storms and cleanup, making them very difficult to interpret.
The Fed found slowdowns in the Gulf Coast economy, but continuing growth in the rest of the country, according to the report, which is known as the Beige Book because of the color of its cover.
Reinforcing the Fed's concerns about inflation, the book warns that high prices for building materials and fuels are spreading through the economy.
Until the Fed report was issued, the markets were struggling. Stocks benefited from stronger than expected earnings at Altria Group Inc.--the parent of Philip Morris tobacco--JPMorgan Chase and Yahoo! Inc. Intel and Eastman Kodak delivered quarterly profits that disappointed investors, but they were the exceptions. Most companies that have reported so far have met or exceeded profit projections.