The Dow Jones Industrial Average was in record territory for the second-consecutive session as oil continued its downward spiral and a weak report on the services sector bolstered the case for a market-friendly Federal Reserve.
After a slow open, the Dow overcame selling pressure on Wal-Mart (WMT - news - Cramer's Take) and rose 36 points, or 0.3%, to 11,764, an intraday high. The S&P 500 was gaining 3 points, or 0.2%, at 1337, and the Nasdaq Composite was 15 points higher at 2259.
The industrials surged after the Institute for Supply Management's services index dropped to 52.9 in September from 57.0 the previous month. The reading was below consensus forecasts and was the lowest figure since April 2003.
Wall Street now has to gear up for commentary from several Federal Reserve bankers, including the chairman, Ben Bernanke, and the vice chairman, Donald Kohn.
Lately, Fed officials have indicated that they believe the economy is moderating, but not enough to start thinking about cutting rates. The weak ISM services number will likely suggest to traders that the Fed will remain on the sidelines, if not become more dovish.
At the last two meetings of policymakers, rates have been left unchanged at 5.25%. Before that, the Fed lifted its fed funds target at 17 straight meetings in a bid to keep the economy from overheating.
Still, Ian Shepherdson, chief economist with High Frequency Economics, said the ISM report was mixed overall.
Who wants to go on a yatch buying spree later? We can take my H2 down to the lot.
Facebook
Twitter