US stocks rally ahead of elections

Tuesday, November 2, 2010

NEW YORK - US stocks rallied Tuesday ahead of election results that will likely see Republicans take over at least one chamber of Congress.

The US central bank’s board will likely begin a new round of monetary measures to stimulate the economy Wednesday, when it is expected to begin a programme to buy as much as $500 billion in government debt over the coming months to force down interest rates and help push investors back into the private sector.

The broad-based Standard & Poor’s 500 Index has surged 14 percent since Federal Reserve chairman Ben Bernanke indicated in August that he was considering pumping more cash into the economy.

Economists are divided on how much impact such a large-scale effort will have, coming amidst a sluggish recovery. The last major infusions of money came as the country teetered on the brink of financial meltdown in late 2008.

The blue-chip Dow Jones Industrial Average rose 64.10 points, or 0.58 percent, to 11,188.72. The S&P 500 climbed 9.19 points, or 0.78 percent, to 1,193.57. The technology-heavy Nasdaq Composite Index notched up 28.68 points, or 1.14 percent, to 2,533.52.

The US currency fell against the euro to 71.24 euro cents from 72.01 euro cents Monday. The dollar dipped against the Japanese currency to 80.64 yen from 81.02 yen.

Filed under: Economy

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