Issue link: https://www.epageflip.net/i/82924
10A Daily News – Friday, September 14, 2012 NEW YORK (AP) — The stock market staged a huge rally Thursday after investors got the aggressive economic help they wanted from the Federal Reserve. The Dow Jones industri- The Fed steps in, and stocks soar: Dow climbs 206 Wall Street al average spiked more than 200 points and cleared 13,500 for the first time since the beginning of the Great Recession. The aver- age is within 625 points of its all-time high. The Fed said it would spend $40 billion a month, for as long as it takes, to stimulate the economy by buying mortgage securities — and perhaps buy more if the job market doesn't improve. The central bank also extended its pledge of super-low short-term inter- est rates into 2015, extended a program to drive down long-term rates and promised to maintain ''highly accommodative'' policy even after the econo- my strengthens. It was the package known as QE3 — a third round of quantitative eas- ing, in market-speak. And it was just what investors were hoping for. ''They're saying that the nomic output. The stock market had already enjoyed a summer rally, in part because investors were betting on more Fed action. The Dow has climbed more than 1,100 points since the start of June. punch bowl, the fuel for the economy, isn't going away — it's going to be here as long as you need it,'' said Tony Fratto, a former aide to President George W. Bush and managing partner at Hamilton Place Strate- gies, a policy consulting firm in Washington. The Dow closed up 206.51 points, the seventh- biggest gain this year, at 13,539.86, its highest close since the last days of December 2007, the first month of the recession. The broader Standard & Poor's 500 index was up 23.43 points at 1,459.99, also its highest since December 2007. The Nas- daq composite index, which has been trading at its high- Still, stocks spiked Thursday in industries across the economy. Materi- als companies, which tend to do well when the econo- my picks up, enjoyed the biggest gain — 2.6 percent as a group. Bank stocks also surged. est levels since 2000, was up 41.52 at 3,155.83. David Abuaf, chief investment officer at Hefty Wealth Partners, said he expects investors to keep shifting from safer assets like government bonds to stocks. That could push stock prices higher and start a cycle of increased wealth and spending. ''People will feel more bond-buying by the Fed since the financial crisis struck in the fall of 2008. The goal is to lower long- term interest rates, get peo- ple to borrow and spend more and push investors into stocks. This is the third round of confident, consumers will buy more goods, and GDP growth will increase,'' he said, referring to the gross domestic product, or eco- If history is any guide, stocks could rally a bit more. In the three months follow- ing March 2009, when the Fed said it would expand its first round of buying, the S&P 500 rose 18 percent. In the three months after the central bank hinted at a sec- ond round of buying in August 2010, the S&P rose 14 percent.