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By Jennifer Yousfi
Wall Street extended yesterday's gains today (Wednesday) on the strength of the U.S. Federal Reserve's plan to inject more liquidity into the ailing credit markets.
"The Fed has found the right mix to stop the spread of the credit crisis," Ken Tower, chief market strategist at Covered Bridge Tactical, told MarketWatch. "It doesn't mean that it's over and it won't get better tomorrow, but the outlook has brightened considerably."
At noon ET today, the blue-chip Dow Jones Industrial Average Index had an increase of 86.05 points (0.71%), to trade at 12,242.86. The tech-laden Nasdaq Composite Index rose 15.40 points (0.68%), to reach 2,271.16. And the broader Standard & Poor's 500 Index had gained 5.36 points (0.41%), to settle at 1,326.01.
The basic materials (1.52%), conglomerate (1.75%) and financial (1.11%) sectors posted the biggest gains. The energy (-0.26%) and transportation (-0.11%) sectors had the only declines.
"The global story is still well intact," John Schmitz, who helps manage more than $3.3 billion at Bahl & Gaynor Investment Counsel in Cincinnati, Ohio, told Bloomberg News. "Companies that are already engaged in overseas business are certainly going to benefit. Caterpillar has given us a great example of that."
Caterpillar Inc. (CAT) stock gained on the strength of international sales in emerging markets. The Bear Stearns Cos. Inc. (BSC) gained after Chief Executive Officer Alan Schwartz reconfirmed the company's solvency in an interview with CNBC, despite industry rumors to the contrary.
In Europe, major indices were rallied on news of the Fed's plan to boost liquidity in late afternoon trading. The Paris-based CAC40, London's FTSE 100, Madrid's IBEX 35 and the Frankfurt-based DAX all posted gains.
At midday, the dollar had lost ground against the euro [down 0.847%], the yen [down 0.706%] and the pound sterling [down 0.659%].
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