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Fed's words lift Dow to 207-point surge
NEW YORK--The stock market staged a huge rally after investors got the aggressive economic help they wanted from the Federal Reserve. The Dow Jones industrial average finished up 207 points.
The gain pushed the Dow to 13,540, its highest level since December 2007, the start of the Great Recession. The Standard & Poor's 500 index is finishing up 23 points at 1,460. The Nasdaq composite ends the day up 42 at 3,156.
The Fed says it will spend $40 billion a month to purchase mortgage securities because the economy is too weak to reduce high unemployment. It has also extended its pledge of super-low interest rates into 2015.
There were nearly 10 stocks rising for every one falling. Volume was high, 4.5 billion shares.
Rising gas costs lift wholesale prices
WASHINGTON--A sharp rise in gasoline costs drove up wholesale prices last month by the most in more than three years. But outside energy and food, price gains were mild.
The producer price index, which measures price changes before they reach the consumer, jumped 1.7 percent in August, the Labor Department said Thursday. The increase was mostly because gas prices soared 13.6 percent, the biggest gain in three years.
Food prices rose 0.9 percent, driven up by steep increases in the cost of eggs and dairy products.
Excluding the volatile food and gas categories, core wholesale prices rose only 0.2 percent, below July's increase.
Isaac an ill wind for benefits applications
WASHINGTON--The number of Americans seeking unemployment benefits jumped to the highest level in two months, although the figures were skewed in part by Hurricane Isaac.
Applications increased by 15,000 to a seasonally adjusted 382,000, the Labor Department said Thursday. That's up from 367,000 the previous week. The four-week average, a less volatile measure, increased for the fourth straight week to 375,000.
Isaac made landfall as Category 1 hurricane on Aug. 28 in southeastern Louisiana and was later downgraded to a tropical storm. It disrupted work in nine states and boosted applications by roughly 9,000, Labor officials said.
Applications for unemployment benefits reflect the pace of layoffs.
The data on unemployment applications follow last week's disappointing August employment report. And it comes as the Federal Reserve concludes a two-day meeting. Many analysts expect the Fed will announce new steps to boost the economy when the meeting ends.