NEW YORK (CNNMoney.com) -- Stocks rallied Wednesday as investors bet that the Federal Reserve is moving towards a more accommodative policy.
After climbing 130 points earlier in the session, the Dow Jones industrial average (INDU) closed up 76 points, or 0.7%, according to early tallies. The S&P 500 (SPX) gained 8 points, or 0.7%, and the Nasdaq (COMP) rose 23 points, or 0.9%.
The advance began after blue chips JPMorgan Chase and Intel reported quarterly earnings that beat Wall Street estimates. But traders said the rally was driven by speculation the Fed will announce plans next month to resume large-scale purchases of Treasurys, a strategy called quantitative easing.
"Earnings so far have been strong, and that's definitely a positive," said Abigail Doolittle, a portfolio manager at Johnson Illington Advisors. "But everything is taking a backseat to this incredible focus on QE2," she added, using Wall Street shorthand for the Fed policy.
CNNMoney.com Market Report - Oct. 13, 2010
After climbing 130 points earlier in the session, the Dow Jones industrial average (INDU) closed up 76 points, or 0.7%, according to early tallies. The S&P 500 (SPX) gained 8 points, or 0.7%, and the Nasdaq (COMP) rose 23 points, or 0.9%.
The advance began after blue chips JPMorgan Chase and Intel reported quarterly earnings that beat Wall Street estimates. But traders said the rally was driven by speculation the Fed will announce plans next month to resume large-scale purchases of Treasurys, a strategy called quantitative easing.
"Earnings so far have been strong, and that's definitely a positive," said Abigail Doolittle, a portfolio manager at Johnson Illington Advisors. "But everything is taking a backseat to this incredible focus on QE2," she added, using Wall Street shorthand for the Fed policy.
CNNMoney.com Market Report - Oct. 13, 2010