Created on Wednesday, 06 November 2013 Written by STEVE ROTHWELL, AP Markets Writer
NEW YORK (AP) — Stocks mostly rose in midday trading Wednesday, sending the market back into record territory, as traders anticipated that the Federal Reserve will keep up its stimulus program for some time.
The stock market has surged this year as the Fed's economic stimulus kept interest rates low to encourage borrowing and spending. That stimulus has also kept bond yields near record low levels and made stocks look attractive by comparison.
The big economic news this week has yet to come, U.S. third-quarter economic growth on Thursday and the October jobs report Friday. In the meantime, traders said there wasn't a decisive catalyst Wednesday for the stock market to resume its ascent.
"The markets are going to slowly drift up higher, unless there is something to keep it from happening," said Randy Frederick, a managing director of active trading and derivatives at Charles Schwab.
The Dow Jones industrial average was up 94 points, or 0.6 percent, to 15,712 as of 12:29 p.m. The Standard & Poor's 500 index was up five points, or 0.3 percent, to 1,767. Both indexes crossed above the record closing highs they closed at Oct. 29.
The Nasdaq composite fell 10 points, or 0.3 percent, to 3,929.
Economists expect that the U.S. economy grew at an annualized pace of 2 percent in the July-to-September period, according to FactSet, a financial data provider. They also forecast that U.S. employers added 122,000 jobs in October.
Both pieces of data could give an indication of when the Federal Reserve will pull back its $85 billion-a-month bond-buying program. The Fed surprised investors in September when it said the economy wasn't strong enough for it to start withdrawing the stimulus.
In company news Wednesday, Ralph Lauren was among the biggest gainers in the S&P 500.
The luxury retailer rose $5.88, or 3.5 percent, to $177.10 after the company raised its sales forecast for the year in anticipation of strong holiday sales. Ralph Lauren also increased its quarterly dividend by 12.5 percent to 45 cents.
Tesla Motors was among the biggest decliners in the Nasdaq. The electric carmaker's stock sank $21.12, or 12 percent, to $155.61 after it reported a loss; analysts had been expecting a profit. The stock is still up almost 350 percent this year after the company turned a profit and won raves for its Model S sedan, which starts at $70,000.
In government bond trading, the yield on the 10-year note fell to 2.65 percent, from 2.67 percent on Tuesday. The U.S. Treasury said Wednesday it will begin selling Treasury securities next year that have variable interest rates. It's the first new Treasury security in 17 years.
In commodities trading, the price of oil recovered from an extended slide. Oil advanced $1.84, or 2 percent, to $95.21 a barrel. The price of gold rose $9.20, or 0.7 percent, to $1,317 an ounce.
Among other stocks making big moves, Abercrombie & Fitch fell $4.56, or 12 percent, to $33.75. The teen apparel retailer cut its full-year profit forecast and reported a sharp drop in sales for the third quarter.