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Stocks move higher as Fed meeting begins

Tuesday, October 29, 2013
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In this Friday, Oct. 25, 2013, file photo, trader Jonathan Niles, center, works on the floor of the New York Stock Exchange. U.S. futures are barely moving, Tuesday, Oct. 29, 2013, with so much riding on upcoming policy decisions at the Fed. The U.S. Federal Reserve opens its two-day meeting Tuesday. (AP Photo/Richard Drew, File)
In this Friday, Oct. 25, 2013, file photo, trader Jonathan Niles, center, works on the floor of the New York Stock Exchange. U.S. futures are barely moving, Tuesday, Oct. 29, 2013, with so much riding on upcoming policy decisions at the Fed. The U.S. Federal Reserve opens its two-day meeting Tuesday. (AP Photo/Richard Drew, File)

NEW YORK — The Standard & Poor's 500 pushed further into record territory as Federal Reserve policymakers began a meeting where they were expected to extend a bold economic stimulus campaign.

Following a 16-day partial shutdown of the U.S. government, economists are doubtful that the Fed will begin winding down its $85 billion monthly bond-buying program until at least next year. The budget showdown in Washington rattled consumer confidence and likely crimped economic growth.

"It seems that any movement in the reduction of their bond buying seems to be moving off to be a 2014 event," said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors.

The Fed's policy is aimed at keeping long-term interest rates very low. That benefits U.S. companies by helping them to borrow cheaply and increase their earnings. The program has also helped push the stock market to record highs.

The Nasdaq Stock Market was hit with another technical problem. Nasdaq indexes weren't updated for about 40 minutes starting shortly before noon because of a technical problem. Trading of Nasdaq-listed stocks wasn't affected, the exchange said.

About half the companies in the Standard and Poor's 500 have reported earnings and, so far, most are doing better than investors had expected. Companies in the index are currently forecast to log third-quarter earnings growth of 4.5 percent, according to data from S&P Capital IQ.

On Tuesday, the S&P 500 rose eight points, or 0.5 percent, to 1,770 as of 1:02 p.m. The index is on track to close at a record high for a seventh day this month.

The Dow Jones industrial average gained 96 points, or 0.6 percent, to 15,666. The index, which is just 10 points below the record high close it set on Sept. 18, got a boost from IBM, which announced that it would increase the purchases of its own stock by $15 billion.

IBM rose $4.48, or 2.5 percent, to $181.83, accounting for about a third of the Dow's gain.

The Nasdaq composite rose eight points, or 0.2 percent, to 3,948.

The technical glitch was the latest to hit the Nasdaq Stock Market.

On Sept. 4, the Nasdaq had a brief outage in one of its quote dissemination channels, which are used to provide real-time price quotes on stocks, but trading wasn't affected. On Aug. 22 the exchange suffered a three-hour trading outage that was also attributed to problems with the exchange's price disseminating system.

On Tuesday, stocks rose even after some lackluster economic data on retail sales and consumer confidence.

Retail sales fell 0.1 percent in September, the weakest showing since March, as auto sales dipped, the Commerce Department said Tuesday. Americans' confidence in the economy fell this month to the lowest level since April, as many worried about the impact of the government shutdown, according to a separate report from the Conference Board.

The reports that suggest sluggish economic growth appear to be welcomed by some investors. That's because without signs of accelerating growth, the Fed is unlikely to cut back on its stimulus.

"The data that has been the most attractive to (stock) markets seems to be the data that maintains the status quo," said Brad Sorensen, the director of market and sector analysis at the Schwab Center for Financial Research.

The yield on the 10-year Treasury note was unchanged at 2.52 percent.

In commodities trading, oil fell 46 cents, or 0.5 percent to $98.21 a barrel. Gold dropped $7.20, or 0.5 percent, to $1,344 an ounce.

Among stocks making big moves:

— Masco rose 82 cents, or 3.9 percent, to $21.75 after the maker of cabinets, plumbing fixtures and other building products, said late Monday that new home construction helped increase its income, which beat market expectations.

— Xylem rose $3.29, or 11.4 percent, to $32.25 after the company, which makes water treatment systems, posted third-quarter earnings that exceeded the expectations of analysts as demand in Europe and emerging market economies picked up.

— Tesla fell $2.41, or 1.5 percent, to $160.63. The electric carmaker's stock has slipped about 17 percent from its all-time high of $193.37, reached Sept. 30, following reports that one of the company's Model S sedans had burst into flames after a crash.

 
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