Stocks rise on China, hopes for low rates

NEW YORK - More signs that interest rates will remain low and upbeat economic news from China gave investors more reason to keep buying stocks yesterday.

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 policymakers will hold interest rates low to help resuscitate growth.

Expectations of low rates weighed on the dollar and gave a boost to commodities. Oil and gold held their advances even after the dollar pulled off of a 15-month low.

Investors also drew encouragement from a 16.1 percent jump in industrial production in China. That fanned expectations that a broader global recovery is gaining steam.

A jump in orders at Horsham home builder Toll Bros. Inc. added to hopes that the U.S. economy was also improving.

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

Trading was light because of the Veterans Day holiday, but volume has been weak for most of the month. The bond markets were closed.

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

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

The Dow rose 44.29, or 0.43 percent, to 10,291.26.

The S&P 500 index rose 5.50, or 0.50 percent, to 1,098.51 and during the day topped 1,100 for the first time since last year.

The Nasdaq composite index rose 15.82, or 0.74 percent, to 2,166.90.

The Russell 2000 index of smaller companies rose 5.78, or 0.98 percent, to 592.71.

Shares of home builders rose after Toll Bros. said late Tuesday that it had a 42 percent jump in signed contracts for new homes in its latest quarter.

Shares of Pulte Homes Inc. rose 77 cents, or 8.14 percent, to $10.23, while Beazer Homes USA Inc. shares advanced 63 cents, or 12.35 percent, to $5.73.

Shares of gold producer Newmont Mining Corp. rose 78 cents, or 1.55 percent, to $51.24 and hit a 12-month high.

Macy's Inc.'s shares fell after it did not increase its full-year earnings and sales forecasts as much as analysts had hoped. The stock fell $1.57, or 8.08 percent, to $17.86.

Reports from retailers are important because investors are worried that the economy will not be able to sustain its recovery if consumers do not step up their spending.

Investors will be looking for signals about the economy today when Wal-Mart Stores Inc. as well as the department store chains Kohl's Corp. and Nordstrom Inc. post quarterly numbers. Walt Disney Co. is also scheduled to report.

Overseas, Japan's Nikkei stock average rose 0.1 percent. Britain's FTSE 100 rose 0.7 percent, Germany's DAX index rose 1 percent, and France's CAC-40 added 0.8 percent.