Stocks Post Big Gain After Feds Hold Rates
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The American stock market posted its biggest gain in eight months yesterday, wiping away most of the losses for the year, after the Federal Reserve indicated it is no longer biased toward higher interest rates.
Citigroup Inc. and JPMorgan Chase & Co. sent the Standard & Poor’s 500 Index to its steepest three-day rally in four years on prospects the Fed will lower borrowing costs, spurring loan demand and bolstering profits. Morgan Stanley, the world’s second-biggest securities firm, climbed the most since March 2003 after reporting first-quarter profit surged 70%.
The advance, one month after stocks recorded their biggest decline since 2003, pushed the S&P 500 up 1.2% for the year and pared the Dow Jones Industrial Average’s 2007 drop to 0.1%. The Nasdaq Composite Index’s third straight jump, bolstered by Oracle Corp.’s better-than-expected profit, lifted the index to a 1.7% rise this year.
“We’ve been waiting for the Fed to be on our side,” a manager of $10 billion at Fiduciary Trust Co. in Boston, Michael Mullaney, said. “The Fed’s next move is probably going to be a cut, and probably sometime no later than August.”
