Stocks rise as traders bet on low rates, China growth

Rising signals that interest rates will remain low and upbeat economic news flowing from China gave investors new reason to keep buying stocks on Wednesday.

U.S. Federal Reserve officials signaled in speeches late Tuesday that a recovery in the economy is likely to be weak. Investors took that as another sign that U.S. policymakers will hold interest rates low to help resuscitate growth.

Investors also drew encouragement from a 16.1 percent jump in industrial production in China, the world's fastest growing economy right now. The piece of good news from Beijing fanned expectations that a broader global recovery is gaining steam.

The mix of news was enough to push the Dow Jones industrial average up 44 points to its sixth straight gain. Both the Dow and the broader Standard & Poor's 500 index closed at 13-month highs.

Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said the growth in China's production is a welcome sign that the country is expanding and that consumers there could be stepping up their buying.

China's National Bureau of Statistics reported Wednesday in Beijing that retail sales, or private consumption, soared by more than 16 percent over the corresponding period last year, pointing to an increasing balance of China's growth model.

"Chinese industrial numbers show that there's a domestic economy that's beginning to percolate," Ablin said.

The Dow is up 519 points, or 5.3 percent in six trading sessions. That's the longest stretch of gains since an eight-day advance in late August.

People's Daily Online