NEW YORK (AP) – Investors barreled into stocks Wednesday after an upbeat report on industrial production raised hopes that the economy is strengthening.
According to preliminary calculations, the Dow rose 108.30, or 1.1 percent, to 9,791.71, its highest close since Oct. 6, when it ended at 9,956.
The broader Standard & Poor’s 500 index rose 16.13, or 1.5 percent, to 1,068.76, while the Nasdaq composite index rose 30.51, or 1.5 percent, to 2,133.15.
The Dow Jones industrial average rose 108 points to another high for the year as General Electric Co. and International Business Machines Corp. jumped. It was the market’s eighth gain in nine days.
The promising report from the Federal Reserve on industrial production came a day after Fed Chairman Ben Bernanke said that the recession was likely over. Investors have been scooping up stocks for six months in anticipation of a rebound in the economy.
The central bank’s report that industrial activity surged 0.8 percent in August topped expectations. The Fed also said the improvement in industrial production for July was twice what it had initially reported.
The industrial report and rising commodity prices lifted shares of manufacturing companies like aluminum producer Alcoa Inc.
Other big gains came from financial stocks, which have been building momentum as they push above certain price levels watched by traders. GE, which has a large financial arm and often trades like a bank stock, jumped for a third day. Bank of America Corp. and JPMorgan Chase & Co. rose more than two percent.
The advance comes even as analysts warn that stocks are due for a correction. Money has been flowing into stocks as some professional investors rush to keep with the market’s gains and fear being left behind.
“People are looking to play catch-up at this point,” said Christian Bendixen, director of technical research at Bay Crest Partners LLC in New York.
Many analysts are encouraged by the market’s climb but say it can’t continue without a few drops arriving too. The S&P 500 index, the benchmark for many mutual funds, has jumped 55.6 percent since it hit a 12-year low in early March. Extended ascents in the market tend to spook investors, who see it as a sign of indiscriminate buying.