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STOCKS UP FOR 4TH STRAIGHT DAY

 
Published Sept. 10, 2009

NEW YORK - The stock market extended its gains to a fourth day as the Federal Reserve said the economy was stabilizing.

The Standard & Poor's 500 index, which is the basis for many mutual funds, reached an 11-month high as industrial stocks rallied. The Dow Jones Industrial Average rose 50 points to its second-highest close of the year.

The market stumbled briefly after the release of the Fed's report on regional economies, which also found that consumer spending would rise, but only because of car purchases linked to the government's Cash for Clunkers program. The report also said the job market remains weak. The prolonged slump in consumer spending has been one of the most serious points of worry for economists, and the Fed's warning about it deflated some of the market's optimism.

Matt Lloyd, chief investment strategist at Advisors Asset Management, said investors were jittery following the Fed's report because many traders are fearful of a correction following a 50 percent surge in stocks over the past six months.

"To me there is no conviction" behind the market's recent gains, Lloyd said.

Jeff Kleintop, chief market strategist at LPL Financial Services, said economic readings are becoming a less powerful force on the market as more investors begin to expect improvement.

"Economic data has lost a lot of its power to really move the market around. The consensus has now become we're in a recovery."