NEW YORK — The Dow rose sharply for a second straight day Wednesday, coming within 100 points of its all-time high.
The market surged after more evidence that the Fed will keep interest rates low, housing will continue in its recovery and shoppers aren’t pulling back on spending.
The gains were broad: Twenty-nine of 30 stocks in the Dow Jones industrial average rose. All 10 industries in the Standard & Poor’s 500 index climbed.
The Dow Jones industrial average rose 175.24 points, or 1.3 percent, to 14,075.37. The index is nearing its record close of 14,164 reached in October 2007.
The Dow has surged 290 points in the past two days, erasing its drop of 216 points Monday when inconclusive results from an election in Italy renewed worries that Europe’s fiscal crisis could flare up again.
“The market psychology has clearly shifted. It’s no longer sell the rally, it’s buy the dips,” said Dan Veru, chief investment officer of Palisade Capital Management. “The economic data continues to be strong.”
Stocks have surged since the start of the year. The Dow is up 7.4 percent.
Earnings for S&P 500 companies will climb 7.8 percent in the fourth quarter, the third-straight quarter of growth, according to data from S&P Capital IQ.
The Standard & Poor’s 500 index gained 19.05 points, or 1.3 percent, to 1,515.99. The Nasdaq composite rose 32.61 points, or 1 percent , to 3,162.26. The index is 6.5 percent higher for the year and is about 3.1 percent short of its record close of 1,565.
Three stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume was a low 3.4 billion shares.
Investors were also encouraged Wednesday that Federal Reserve Chairman Ben Bernanke stood behind the central bank’s low-interest-rate policies as he faced lawmakers for a second day. His comments dissipated worries about the bank’s resolve to keep up the program. Those worries sprang up last week when minutes from the bank’s last policy meeting revealed disagreement among Fed officials.
The number of Americans who signed contracts to buy homes rose in January from December to the highest level in almost three years. Thereport continued a string of positive housing news. Sales of new homes jumped 16 percent last month to the highest level since July 2008, the government reported Tuesday.
“Some encouraging news for the bulls has been the housing data that has come out over the past couple of days,” said Todd Salamone, director of research at Schaeffer’s Investment Research.
The analyst said he remained “extremely bullish” on stocks in the medium and long-term, but cautioned that a pullback may lie ahead in after the year’s strong gains.
Discount retailers rose Wednesday. Dollar Tree jumped $4.31, or 11 percent, to $45.39 after reporting a 22 percent profit increase. Dollar General rose $1.61, or 3.6 percent, to $46.56. Family Dollar Stores rose $1.39, or 2.5 percent, to $57.68.
Business, Pages 26 on 02/28/2013