Several RV stocks rode the shirttails of encouraging news from the Federal Reserve Board to close higher on Wall Street today (Aug. 12).
Six of the 10 publicly held stocks tracked daily by RVBUSINESS.com closed higher on Wall Street, led by Spartan Motors which rose 6.64% to close at $5.62. Drew Industries Inc., Equity LifeStyle Properties Inc., Flexsteel Industries Inc., Thor Industries Inc. Winnebago Industries Inc. and Navistar Internal Corp. also closed higher.
A more upbeat Federal Reserve is reassuring investors that they’ve been making the right bets, according to an analysis by Associated Press. Stocks bounded higher today after the central bank said the economy appears to be “leveling out” rather than simply shrinking at a slower rate.
The Fed’s more positive take on the economy compared with its assessment in June wasn’t surprising but it still bolstered hopes that the economy is in fact rebounding.
Today’s advance restarted the market’s summer rally after a pause on Monday and Tuesday. Major market indexes jumped more than 1%, including the Dow Jones industrial average, which jumped 120 points.
Investors drew reassurance from Fed policymakers’ comments. The central bank left interest rates unchanged, as expected, following a two-day policy meeting.
“They did really endorse the fact that we’re moving into recovery, not searching for the bottom,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
Stocks have been rallying much of the past four weeks on expectations that the economy is strengthening.
The Fed also said it would slow the pace of its program to buy $300 billion worth of Treasury securities so that it will close at the end of October, rather than September as originally intended. The central bank has bought $253 billion of the securities so far. The program is designed to reduce rates on mortgages and other consumer debt.
“The fact that they are going to wind down the Treasury purchases I think leaves the clear impression that they are quite satisfied with the progress we are making in the recovery,” McCain said.
But some analysts are skeptical that the market can maintain its climb even with the Fed’s more optimistic words. The S&P 500 index is up 14% in little more than a month and 48.7% since it fell to a 12-year low in early March.
“I looks like a pretty sharp rise to me to have a lot of sustainability,” said Dan Cook, senior market analyst at IG Markets in Chicago.
According to preliminary calculations, the Dow rose 120.16, or 1.3%, to 9,361.61. The Standard & Poor’s 500 index rose 11.46, or 1.2%, to 1,005.81, while the Nasdaq composite index gained 28.99, or 1.5%, to 1,998.72.
Rising stocks outpaced those that fell 5-to-2 on the New York Stock Exchange, where volume came to a light 1.2 billion shares, flat with Tuesday. Light volume can skew price moves but is typical of late summer when many traders take vacations.
The gains came a day after the market posted its biggest loss in five weeks. The Dow fell 97 points as investors worried about the health of banks.