Friday, Jul 01, 2016
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Economy

Stocks extend rally on hopes for Fed action

NEW YORK — Stocks inched higher Monday as investors tried to extend a rally that pushed the Dow Jones industrial average above 11,000 for the first time since early May.

Traders in recent days have been betting the Federal Reserve will act in the coming weeks to stimulate the economy and drive interest rates lower. The Fed could announce, as early as its meeting in early November, that it will resume a program to buy Treasury bonds. Lower rates on bonds make stocks a more attractive investment.

The bond market was closed Monday for the Columbus Day holiday.

Traders will get key economic reports at the end of the week, including data on inflation, retail sales and consumer sentiment, that could further sway trading. The Fed has said part of the reason it might buy bonds is to get inflation more inline with historical levels. There has been little inflation as the economy remains sluggish.

Earnings season also picks up with industry bellwethers Intel Corp., JPMorgan Chase & Co. and General Electric Co. releasing quarterly results.

No major economic or earnings reports are due out Monday.

In corporate news, Microsoft Corp. is set to unveil its first batch of Windows Phone 7 smart phones. The move is aimed at strengthening Microsoft's position in the competitive mobile market where Apple Inc.'s iPhone, Research in Motion Ltd.'s BlackBerry and Google Inc.'s Android phone software are more popular.

The Dow rose 7.71, or 0.1 percent, to 11,013.29 in early morning trading. The Dow has risen five of the past six weeks and is now 1.8 percent from its highest level of the year.

The Standard & Poor's 500 index rose 1.32, or 0.1 percent, to 1,166.47, while the Nasdaq composite index rose 2.35, or 0.1 percent, to 2,404.26.

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