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Stocks are also benefiting from the economic stimulus from the Federal Reserve and other global central banks. Under a program called "quantitative easing," the Fed has bought trillions of dollars of bonds, pushing up their prices and sending their yields lower. That makes stocks more attractive to investors than bonds and keeps interest rates low throughout the economy, encouraging investment and spending. The U.S. central bank began buying bonds in January 2009 and is still purchasing $85 billion each month in Treasury bonds and mortgage-backed securities. The Dow has even managed to climb to a record despite the backdrop of political wrangling in Washington. Automatic government budget cuts took effect Friday after President Barack Obama and Congress failed to reach a budget deal. Economists expect the cuts to hurt U.S. economic growth. From its March 2009 low to today, the Dow's gain has been led by: American Express, up almost 500 percent from $10.64 to $64.12. Home Depot has jumped almost 300 percent from $18.23 to $70.47. Caterpillar, the maker of the construction and mining equipment, has gained 277 percent, from $23.92 to $90.21. Entertainment giant Walt Disney has surged 262 percent, from $15.59 to $56.48. Stocks with small gains include Exxon Mobil, which has advanced 38 percent from $64.57 to $89.61, Cisco Systems, up 55 percent from $13.62 to $21.22, and Wal-Mart, which has climbed 55 percent from $47.51 to $73.72. Hewlett-Packard is the only stock in the index that is lower than it was four years ago, falling 22 percent from $25.53 to $20.37. Investors received another piece of positive news on the U.S. economy, a report that U.S. service companies grew in February at the fastest pace in a year, thanks to higher sales and more orders. The gain suggests higher taxes have yet to slow consumer spending on services. Home builder PulteGroup rose 50 cents, or 2.5 percent, to $20.22 following news that home prices rose at the fastest pace since before the housing market collapse. That is a sign that the market is gaining momentum as it nears the spring selling season. Home prices rose 9.7 percent in January compared with the same month a year earlier, the fastest rate of growth recorded since April 2006, according to data released by CoreLogic. In the five years ending in 2012, investors pulled a net $545 billion from U.S. stock mutual funds, according to data from Investment Company Institute. During the same period, they poured a total of $1 trillion into bond mutual funds. In January, ICI estimates that investors put a net $18.6 billion into stock funds. On Tuesday, the Standard & Poor's 500 index rose 15 points, or 1 percent, to 1,539.79. The index is 25 points, or 1.6 percent, from its own record close of 1,565. The Nasdaq composite gained 42 points, or 1.3 percent, to 3,224.13. The index is 1,825 points, or 57 percent, short of its record close of 5,048.62 from March 10, 2000. Another record was reached, though: The Dow Jones transportation average closed at an all-time high of 6,136.72, up 92 points, or 1.5 percent. The yield on the 10-year Treasury note rose two basis points to 1.90 percent. Gold rose $2.50, or 0.2 percent, to $1,574.90 an ounce and the price of oil climbed 70 cents, or 0.8 percent, to $90.82 a barrel.
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