Wall Street Stocks Hit Record Highs

Morning Business Memo:

The stock market today opens at fresh highs seven weeks after the averages began falling with worries about whether the Fed would end its policy of bond buying stimulus and ultra-low interest rates. With Thursday's gain of nearly 1.5 percent, the S&P 500 has gained back all of its recent losses. This week's soothing words from Ben Bernanke did much to boost the market. The Dow and S&P 500 rose to new records Thursday.

Another driver for the markets has been fresh signs of economic strength and hopes for a positive earnings season. The nation's biggest bank, JP Morgan Chase, reports a 31 percent rise in 2nd quarter profits. The bank made $6.5 billion. The 10 year Treasury note - the baseline for most mortgages - fell back from a recent high of 2.7 percent to 2.54 percent.

Will Glass-Steagall make a comeback? Democrat Elizabeth Warren and Republican John McCain are among a bipartisan group of senators calling for a modern version of the 1933 Glass-Steagall Act. For decades, that law provided a wall between retail banking and riskier investment bank activity. Deregulation in the late 1990s changed the rules, allowing big banks to jump into investment products, hedge funds and private equity business. "Banking should be boring," Warren told reporters, arguing that people who take big risks with money "should go to Wall Street" and avoid traditional banking. The bill would separate banks that are insured by the Federal Deposit Insurance Corp. from riskier financial institutions.

The University of Michigan releases its consumer sentiment index today. Other recent reports suggest confidence in the economy is at a five-year high. Retailers are reporting strong sales gains in June. A preliminary tally by the International Council of Shopping Centers finds revenue rose 4.1 percent last month. It had expected an increase of 3 to 3.5 percent. The data offer positive signs for the back-to-school season, which is the second-biggest shopping period behind the winter holidays.

More Americans are stretching the length of their car loans to help them afford the cost of a new set of wheels. According to a survey by JD Power, 30 percent of new car loans are for at least six years. "The standard length of car loans - once four years, then five - has been creeping up for some time," The Los Angeles Times reports. "Extended terms are gaining traction in an era when cars last longer and have better warranties."

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc

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