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U.S. stocks ended higher Wednesday, with the S&P 500 Index posting its biggest one-day gain in six months, as investors cheered a raft of positive earnings reports, a fall in oil prices and a broadly upbeat Federal Reserve survey on the economy.
According to CBS MarketWatch, the session gains came amid continuing concern about inflation and fears that interest rates will continue to rise.
The Dow Jones Industrial Average posted its first triple-digit increase in six weeks, gaining 128.87 points, or 1.25% to 10,414.13. The Nasdaq Composite Index put in its best one-day performance in more than three months, rising 35.24 points, or 1.7% to 2,091.24 while the S&P 500 Index ended up 17.62 points, or 1.5% at 1,195.76, its best one-day gain since April 21.
“The market turned around for three reasons,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “First, we’ve seen a rebound in energy stocks which have been hit very hard in the past few days on profit taking.”
“Second, the market was oversold and there was some short covering. Finally the market has chosen to focus a little bit more on some of the more positive earnings reports.”
Crude futures fell, pressured by easing concerns that Hurricane Wilma will hurt energy production in Gulf of Mexico and U.S. data showing a rise in crude and gasoline supplies and fall in product demand. The November benchmark contract ended down 79 cents at $62.41 a barrel in New York trading.
Sheldon said the Fed’s “Beige Book” survey also helped lift investor sentiment as it underlined continuing growth in the economy in the wake of Hurricanes Katrina and Rita.
In the Beige Book, which tracks current economic conditions across the country, the Federal Reserve also said inflationary pressures were growing while higher wages were reported across a number of industries.