Dow, S&P 500 Hit New highs on Hopes Fed Won't Taper bond-buying

Stocks pushed higher Tuesday, in a rally that sent the Dow Jones industrials and the Standard & Poor's 500 Index to new highs.

The Nasdaq Composite Index finished at a 13-year high.

The rally was built on expectations the Federal Reserve will leave its current bond-buying program in place after it finishes a two-day meeting on Wednesday. In addition, investors appear to be satisfied with the third-quarter earnings season.

The Fed has been buying in longer-term Treasury and mortgage bonds, to keep interest rates low and support the economy. The 10-year Treasury yield fell 2.507 percent from Monday's 2.512 percent.

It was not clear if Tuesday's momentum will be sustained in Wednesday's trading. Shares of LinkedIn LNKD and Yelp YELP fell more than 4 percent each after hours, when their earnings disappointed investors.

The Dow closed up 111 points, or 0.7 percent, to 15,680, breaking its old record of 15676.94, set on Sept. 18. The S&P 500 added nearly 10 points, or 0.56 percent, to 1,772, its fourth straight gain and ninth in the last 10 sessions.

The Dow was boosted by IBM's IBM announcement it's adding $15 billion to its stock repurchase program.

Big Blue's shares jumped $4.83, or 2.7 percent, to $182.18. That contributed 31 points to the Dow's gain alone.

Also helping stocks were decent earnings from cell-phone giant Nokia NOK. Nokia's 10.4 percent gain to $7.45 also boosted AT&T T, up 1.97 percent to $36.27, and Verizon Communications VZ, up 1.04 percent to $51.10. They added about 12 points to the Dow's gain.

The rally was decently broad. A total of 401 S&P 500 stocks were higher, along with 24 Dow stocks. In addition, 70 Nasdaq-100 stocks were higher; the index gained 9 points, or 0.3 percent, to 3,192.

Equities Trading Up
Nokia shot up more than 10 percent to $7.45 after the company issued an upbeat outlook for its Nokia Solutions and Networks unit. Nokia posted a Q3 net loss of 91 million euros ($125 million), versus a year-ago net loss of 969 million euros.

Shares of Pitney Bowes PBI got a boost, shooting up 8.63 percent to $20.90 after the company reported an upbeat third-quarter profit.

Xylem XYL was also up, gaining 12.44 percent to $32.53, top among S&P 500 stocks. The maker of water-treatment systems reported better-than-expected third-quarter results and lifted its FY13 outlook.

Equities Trading Down
Shares of Volcano VOLC were down 13.83 percent to $20.99, after the company reported Q3 revenue. JP Morgan downgraded the stock from Overweight to Neutral and lowered the price target from $29.00 to $24.00.

Swiss banking giant UBS UBS shares tumbled 8.2 percent to $19.62 on Q3 results. It also warned that it faces potential new costs from legal cases.

Engine-builder Cummins CMI dropped 5.2 percent to $127.84 after the company reported $1.90 a share in earnings, missing the Street estimate of $2.11 and lowered its FY13 revenue outlook.

Commodities
In commodity news, crude oil in New York traded down 0.49 percent to $98.20, while gold traded down 0.5 percent to $1,345.50 an ounce. Silver settled down 0.2 percent Tuesday to $22.49 an ounce. Copper ended up 0.28 percent to $3.28 a pound.

Eurozone
European shares were higher Tuesday. The Spanish Ibex Index rose 1.31 percent, while Italy's FTSE MIB Index surged 2.27 percent. Meanwhile, the German DAX Index rose 0.48 percent, and the French CAC 40 surged 0.62 percent. The U.K.'s FTSE-100 Index gained 0.73 percent.

Economics
U.S. retail sales fell 0.1 percent in September. Economists had expected sales to be unchanged in the month.

The U.S. producer price index declined 0.1 percent in September, while core wholesale prices climbed 0.1 percent. Wall Street was looking for a 0.3 percent gain in the overall PPI and a 0.1 percent increase in the core PPI.

The S&P/Case-Shiller home price index rose 12.82 percent year over year in August, up from 12.40 percent growth in July. Economists had expected a 12.50 percent rise.

The ICSC-Goldman Sachs store sales index dropped 0.4 percent in the week ended Saturday from the earlier week. The Johnson Redbook Sales Index declined 1.3 percent in the first three weeks of October versus September.

The Conference Board's consumer confidence index fell to 71.20 in October, from a prior reading of 79.70. Economists had expected a reading of 75.

U.S. business inventories rose 0.30 percent in August, in line with the Street consensus but down from 0.40 percent growth in July. However, economists were expecting a 0.30 percent gain.

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Posted In: EarningsNewsBondsEurozoneCommoditiesEconomicsFederal ReserveAfter-Hours CenterMarketsbondsCommoditiesDow Joneseconomic reportsEconomyEquitiesmarketsNASDAQS&PSPX 500Wall Street
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