NEW YORK - Investors barreled into stocks Wednesday after an upbeat report on industrial production raised hopes that the economy is strengthening.
The Dow Jones Industrial Average rose 108 points to another high for the year as General Electric and IBM jumped.
The promising report from the Federal Reserve on industrial production came a day after Fed Chairman Ben Bernanke said that the recession was likely over. Investors have been scooping up stocks for six months in anticipation of a rebound in the economy.
The central bank's report that industrial activity surged 0.8 percent in August topped expectations. The Fed also said the improvement in production for July was twice what it had initially reported.
Money has been flowing into stocks as some investors rush to keep with the market's gains and fear being left behind.
"People are looking to play catchup at this point," said Christian Bendixen, director of technical research at Bay Crest Partners LLC in New York.
Peter Schwartz, principal at Gregory J. Schwartz & Co. in Bloomfield Hills, Mich., expects stocks will rise, but not without interruptions. "We can't have this trajectory for perpetuity without speed bumps along the way," he said.
Jason Pride, director of research at Haverford Investments in Radnor, Pa., would like to see more moderate gains but said the nature of markets is to overdo it. "The market can extend its speculation surrounding this economic rebound much longer than people expect," he said.