Stocks Soar on Fed Stimulus Hopes
NEW YORK (TheStreet) -- The U.S. benchmark indices settled sharply higher Monday as investors clung to the hope of further economic stimulus following Federal Reserve chairman Ben Bernanke's warning about long-term unemployment.
The Dow Jones Industrial Average closed up 160.9 points, or 1.2%, at 13,242. All companies on the index rose except Verizon Communications(VZ) , whose shares fell after Citigroup lowered its earnings estimates on the company. Dow leaders included Pfizer(PFE) , American Express(AXP) and Merck(MRK) .
The S&P 500 gained 19.4 points, or 1.4%, at 1417, on Monday hitting its highest level since 2008. The Nasdaq added 54.7 points, or 1.8%, at 3123, settling above 3100 for the first time since November 2000.
Bernanke said that "continued accommodative policy" is needed to support the economy's recovery.
"If progress in reducing unemployment is too slow, the long-term unemployed will see their skills and labor force attachment atrophy further, possibly converting a cyclical problem into a structural one," he explained.
Stock futures popped following his comments, suggesting that some investors believe further stimulus is on the horizon. However Dan Greenhaus, chief global strategist with BTIG, said that the central bank would be more likely to extend its current Operation Twist program than start a new purchase program.
"The distinction may seem academic to some but to the Chairman, the choice of 'continued