Stocks shot higher on Wednesday, with the Federal Reserve's upbeat assessment of the U.S. economy underlining widespread optimism that the recovery is gaining traction.
The Dow Jones industrial average closed at 12,288.17, up 61.53 points, or 0.5 per cent. The broader S&P 500 closed at 1,336.32, up 8.31 points, or 0.6 per cent – representing a gain of slightly more than 100 per cent since hitting an intraday low of 666 in March, 2009. In Canada, the S&P/TSX composite index closed at 14,059.18, up 129.83 points, or 0.9 per cent.
Investors looked beyond a rise in U.S. core producer prices for January, which reflects growing concerns about rising inflationary pressures, and instead focused on strong home construction, rising earnings and an upwardly revised growth forecast from the Fed. In the minutes from its last monetary policy meeting, the Fed raised its growth forecast for 2011 to 3.4 per cent to 3.9 per cent, from an earlier forecast of 3 per cent to 3.6 per cent.
In earnings news, Dell Inc. on Tuesday sailed past expectations with its quarterly earnings, due largely to rising corporate sales. The shares rose 11.9 per cent and raised other stocks in the technology sector. Hewlett-Packard Co. rose 2.1 per cent.
In other moves, JPMorgan Chase & Co. rose 2.4 per cent, Boeing Co. rose 1.5 per cent and Walt Disney Co. rose 1.4 per cent. However, key defensive stocks, such as Wal-Mart Stores Inc., Procter & Gamble Co. and McDonald's Corp. fell.
Among Canadian stocks, blue-chip energy stocks were strong, with Suncor Energy Inc. up 3.8 per cent and Canadian Natural Resources Ltd. up 4.2 per cent. By comparison, the rise in crude oil was quite tame, rising 67 cents (U.S.), to $84.99 a barrel.
Rogers Communications Inc., which missed expectations with its quarterly earnings, nonetheless rebounded from an earlier decline during the day, closing 1.9 per cent higher. Manulife Financial Corp. rose 2 per cent and Research In Motion Ltd. rose 4.2 per cent.
David Berman