CLOSING BELL: US stocks extend gains to a 5th day as tech companies rise
NEW YORK — U.S. stocks rose for the fifth consecutive day Wednesday as investors went on a late buying spree. The gains came after news that the Federal Reserve plans to start reducing its huge portfolio of bonds. The Standard & Poor's 500 index closed at a record high.
Stocks were slightly higher for most of the day as the market kept chipping away at the losses it suffered one week before. Technology companies like TurboTax maker Intuit and materials companies including industrial gas company Praxair made some of the biggest gains.
In the afternoon the Federal Reserve released the minutes from its latest meeting. Officials discussed steps for shrinking the central bank's $4.5 trillion in bond holdings and Wall Street liked what it saw.
The Fed bought huge amounts of bonds during the global economic crisis in an effort to stimulate the economy. When the Fed suggested in April that it was considering reducing its portfolio, investors were unnerved. But when investors saw some details of how the plan might look, they were pleased.
"They're going to do it in a very careful, slow, and, at least by Fed standards, transparent method," said Ed Campbell, senior portfolio manager at QMA, a fund owned by Prudential Financial. "They're not going to do it in a way that runs the risk of shocking the market."
The Standard & Poor's 500 index picked up 5.97 points, or 0.2 percent, to 2,404.39. The Dow Jones industrial average gained 74.51 points, or 0.4 percent, to 21,012.42. The Nasdaq composite rose 24.31 points, or 0.4 percent, to 6,163.02. The Russell 2000 index of small-company stocks added 1.53 points, or 0.1 percent, to 1,382.51.
In the wake of the Fed's disclosure, bond prices turned higher. The yield on the 10-year Treasury note fell to 2.25 percent from 2.28 percent. High-dividend stocks including utility companies and real estate investment trusts climbed as investors looked for yield. NRG Energy jumped 88 cents, or 5.5 percent, to $16.76 and Simon Property Group gained $2.53, or 1.6 percent, to $159.78.
Industrial gas company Praxair rose after it agreed to terms with Germany's Linde. The companies said they would combine in an all-stock deal in December, part of a wave of consolidation in the chemical and materials industries. Praxair picked up $2.30, or 1.8 percent, to $132.27. Linde's German stock rose 2.8 percent.
Dow Chemical and DuPont, which are also planning to combine, rose as well. Dow picked up 67 cents, or 1.1 percent, to $61.45 and DuPont advanced $1.04, or 1.3 percent, to $78.38.
Accounting software maker Intuit had a stronger quarter than investors expected and Wall Street was also pleased with its forecasts. Its stock gained $8.68, or 6.7 percent, to $137.83. Other technology firms once again rallied. Hard drive maker Western Digital added $1.67, or 1.9 percent, to $89.70 and chipmaker Nvidia rose $1.54, or 1.1 percent, to $138.57.
General Electric slumped after CEO Jeffrey Immelt addressed an industry conference. Immelt suggested it will be tough for the company to reach the earnings targets some investors want to see. The stock fell 45 cents, or 1.6 percent, to $27.83. GE, which is seen as a bellwether for many different industries, has been trading at its lowest price in a year and a half.