Bernanke's news helps lift markets

ByABC News
September 15, 2009, 8:15 PM

NEW YORK -- Better news on retail sales and manufacturing helped send stocks higher Tuesday, as did comments from Federal Reserve Chairman Ben Bernanke that the recession was probably over.

Surging materials and industrial companies such as Alcoa, which rose $1.05 to $13.99, and Caterpillar, up $2.93 to $51.70, helped pull the Dow Jones industrial average to a gain of 57 points in quiet trading. Manufacturers are expected to be among the early beneficiaries if the economy strengthens and demand picks up.

The Dow rose 56.61 points, or 0.6%, to 9683.41, its highest close since Oct. 6, when it finished at 9956. The Standard & Poor's 500 index rose 3.29 points, or 0.3%, to 1052.63, while the Nasdaq composite index rose 10.86 points, or 0.5%, to 2102.64.

Hopes for a rebound grew after the government reported that retail sales jumped in August by the biggest amount in three years. The Fed's index of manufacturing in the New York region rose to its best level since 2007.

The positive economic news helped allay concerns about a separate government report finding that inflation at the wholesale level rose last month at double the rate analysts expected. Meanwhile, Bernanke cheered investors by saying that the worst recession since the 1930s has "very likely" ended (story, 1B).

Bernanke's assessment of the economy was welcomed by investors who have been placing big bets on a recovery. The S&P 500 has surged 55.6% since skidding to a 12-year low in March.

Stocks zigzagged in morning trading before gaining steam in the afternoon, similar to how trading played out Monday. Analysts say the slow-building gains are a sign that traders are pouncing on dips to get into the rally.

The short-lived bouts of selling have meant the market has advanced without the sizable break that many analysts still say is overdue. Even when the news isn't good, market sentiment seems immune to developments that would have punctured the rally only months ago.