NEW YORK (AP) — Investors pushed stocks higher Tuesday and drove the Dow Jones industrial average close to an all-time closing high on expectations that the Federal Reserve will keep its economic stimulus program in place.
Following a 16-day partial shutdown of the U.S. government, economists are doubtful that the Fed will begin winding down its $85 billion monthly bond-buying program until at least next year.
The budget showdown in Washington rattled consumer confidence and likely crimped economic growth.
"The reduction of their bond buying seems to be moving off to be a 2014 event," said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors.
The Fed's policy is aimed at keeping long-term interest rates low. That benefits U.S. companies by helping them to borrow cheaply and increase their earnings. The program has also helped push the stock market to record highs.
About half the companies in the Standard and Poor's 500 have reported earnings. So far, most are doing better than investors expected. Companies in the index are forecast to log third-quarter earnings growth of 4.5 percent, according to data from S&P Capital IQ.
As of Tuesday afternoon, the Dow Jones industrial average rose 102 points, or 0.7 percent, to 15,671. The index is just five points below its record close from Sept. 18. It got a boost from IBM, which announced that it would increase the purchases of its own stock by $15 billion.
IBM rose $4.15, or 2.3 percent, to $181.27, accounting for about a quarter of the Dow's gain.
The S&P 500 index rose eight points, or 0.5 percent, to 1,770 as of 2:10 p.m. The index is on track to close at a record high for a seventh day this month
The Nasdaq composite rose 10 points, or 0.3 percent, to 3,949.
The Nasdaq Stock Market was hit with a technical problem. Nasdaq indexes weren't updated from 11:53 a.m. to 12:37 p.m. because of a technical problem that was caused by "a human error," the exchange operator said in a statement. Trading of Nasdaq-listed stocks wasn't affected, it said
The technical glitch was the latest to hit the Nasdaq.
On Sept. 4, the Nasdaq had a brief outage in one of its quote dissemination channels, which are used to provide real-time price quotes on stocks, but trading wasn't affected. On Aug. 22 the exchange suffered a three-hour trading outage that was also attributed to problems with the exchange's price disseminating system.
Lackluster reports on U.S. retail sales and consumer confidence couldn't slow stocks on Tuesday.
Retail sales fell 0.1 percent in September, the weakest showing since March, as auto sales dipped.
Americans' confidence in the economy fell this month to the lowest level since April. People were worried about the impact of the government shutdown.
The sluggish growth reflected in the two reports encouraged some investors. The Fed is unlikely to cut back on its stimulus if the economy is struggling to take off.
"The data that has been the most attractive to (stock) markets seems to be the data that maintains the status quo," said Brad Sorensen, the director of market and sector analysis at the Schwab Center for Financial Research.
The yield on the 10-year Treasury note was unchanged at 2.52 percent.
In commodities trading, oil fell 49 cents, or 0.5 percent to $98.21 a barrel. Gold dropped $6.80, or 0.5 percent, to $1,345 an ounce.
Among stocks making big moves:
— Masco rose 78 cents, or 3.7 percent, to $21.70 after the maker of cabinets, plumbing fixtures and other building products, said late Monday that new home construction helped increase its income.
— Xylem rose $3.57, or 12.3 percent, to $32.50 after the company, which makes water treatment systems, posted third-quarter earnings that exceeded the expectations of financial analysts. Demand in Europe and emerging market economies picked up.
— JPMorgan fell 12 cents, or 0.2 percent, to $52.56 after the Wall Street Journal reported that parts of a multi-billion dollar deal between the bank and the Justice Department were at risk of collapsing. The stock had traded as high as $52.99 before the story was published.