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Stocks edge higher ahead of Fed meeting

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[October 30, 2013]  NEW YORK (AP) -- Stocks edged higher Tuesday before a meeting of the U.S. Federal Reserve, where policymakers are expected to extend their bold economic stimulus campaign.

Following a 16-day partial government shutdown, economists that had expected the Fed to begin winding down the $85 billion monthly bond-buying program this year are now doubtful that will happen until at least 2014.

The budget showdown in Washington rattled consumer confidence and likely crimped economic growth.

On Tuesday, the private Conference Board reported that its index of consumer confidence dropped to 71.2 in October, down from 80.2 the previous month.

"It seems that any movement in the reduction of their bond buying seems to be moving off to be a 2014 event," said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors.

Yet strong corporate earnings continue to drive major averages to all-time and multiyear highs.

About half the companies in the Standard and Poor's 500 have reported earnings and, so far, most companies are doing better than expected. Companies in the Standard & Poor's 500 are currently forecast to log third-quarter earnings growth of 4.5 percent, according to data from S&P Capital IQ.

On Tuesday, the S&P 500 rose five points, or 0.3 percent, to 1,767. The Dow Jones industrial average gained 56 points, or 0.4 percent, to 15,624. The Nasdaq composite climbed 10 points, or 0.3 percent, to 3,950.

The yield on the 10-year note rose to 2.53 percent from 2.52 percent on Monday.

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In commodities trading, oil fell 60 cents, or 0.6 percent to $98.13 a barrel. Gold dropped $4.40, or 0.3 percent, to $1,348 an ounce.

Among stocks making big moves:

  • Masco rose 70 cents, or 3.5 percent, to $21.67 after the maker of cabinets, plumbing fixtures and other building products, said late Monday that new home construction helped increase its fiscal third-quarter net income several times over to beat market expectations.

  • Xylem rose $4.77, or 16.8 percent, to $33.69 after the company, which makes water treatment systems, posted third-quarter earnings that exceeded the expectations of analysts as demand in Europe and emerging market economies picked up.

[Associated Press; By STEVE ROTHWELL]

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
 

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