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Interest rate speculation lifts Dow to second high

Interest rate speculation lifts Dow to second high

Wall Street barreled higher Wednesday, propelling the Dow Jones industrials to their second straight record high close as investors shrugged off lackluster economic news and grew more optimistic that the Federal Reserve will lower interest rates as the economy cools.
The Dow, the stock market's best known indicator, soared 123.27 to 11,850.61. It was only Tuesday that the 30 blue chip stocks finally reached a new closing high for the first time in nearly seven years.
The impetus for Wednesday's big push higher was a growing feeling on Wall Street that the Fed might begin lowering rates soon. Investors appeared to take comfort from comments by Fed Chairman Ben Bernanke that the slowing housing market could be a drag on the economy, perhaps shaving 1 percent off of gross domestic product growth in the second half this year and into next year.
The Dow's record-setting day on Tuesday wiped out records that had stood since January 14, 2000. The broader market indicators are still lagging as they try to recover from the turmoil that began with the dot-com bust early in the decade.
Those indexes rose sharply Wednesday along with the Dow, which had a gain of 1.05 percent. The average rose up to 11,851.25, which stands as its current trading high.
The Standard & Poor's 500 index was up 16.11, or 1.21 percent, at 1,350.22 and the Nasdaq composite index rose 47.30, or 2.11 percent, to 2,290.95.
The government surprised investors by reporting a rise in crude oil inventories, and they were also heartened by news that Saudi Arabia said it wanted to keep prices lower. That brought light sweet crude down, though it rebounded and settled up 73 cents at US$59.41 a barrel on the New York Mercantile exchange. Still, oil prices are down sharply from their trading high for the year of US$78.40 a barrel, which came in July.
Advancing issues outnumbered decliners 3 to 1 on the New York Stock Exchange.
The Russell 2000 index of smaller companies was up 15.12, or 2.1 percent, at 733.47.