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Stocks rally after Summers drops Fed bid

By JOSHUA FREED AP Business Writer

Publication: The Day

Published September 17. 2013 4:00AM

Wall Street was happy to see Larry Summers go.

Stocks rose on Monday after Summers, who had been the leading candidate to replace Federal Reserve chairman Ben Bernanke, withdrew his name from consideration.

Summers, a former Treasury secretary, was viewed as being more likely to rein in the government's massive stimulus program, which has kept interest rates low and boosted corporate profits.

Stocks were also helped by news that U.S. factory output rose 0.7 percent in August, the most in eight months.

The Dow Jones industrial average rose 118.72 points, or 0.8 percent, to close at 15,494.78. The Standard & Poor's 500 index rose 9.61 points, or 0.6 percent, to 1,697.60. The Nasdaq composite fell 4.34 points, a fraction of a percent, to 3,717.85, pulled down by a loss in Apple.

Nine of 10 sectors in the S&P 500 rose, led by industrial stocks. Only technology stocks declined.

At its highest point in late morning trading, the S&P 500 was within five points of its previous record close of 1,709.67, set on Aug. 2.

That worried Brad McMillan, chief investment officer for Commonwealth Financial.

McMillan said there are risks that investors don't seem to be accounting for in the prices they're paying. Investors seem to believe corporate profits will keep growing as fast as they have been, even though cheap debt refinancing has driven much of that growth.

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