Stocks rose Monday as investors judged that the economy still isn't growing fast enough for the central bank to cut back on its stimulus program. That stimulus has been a major factor supporting a rally in stocks this year and the threat of it being withdrawn made stock markets more volatile last month.
Investors have stopped worrying about the Federal Reserve. At least for now.
Stocks rose on Wall Street Monday as investors judged that the economy still isn't growing fast enough for the central bank to cut back on its stimulus program.
U.S. manufacturing grew modestly in June after a pickup in new orders and stronger production, according to a private survey. The Institute for Supply Management said its factory index increased to 50.9 in June from 49 in the previous month.
The Standard & Poor's 500 index logged its first monthly decline since October last month after investors were unsettled by comments from Federal Reserve Chairman Ben Bernanke. Bernanke said last month that the Fed could ease back on its stimulus later this year and end it next year, providing the economy continues to recover.
"The market has ... stepped back from the knee-jerk reaction that the Fed news provided," said Jim Russell, a regional investment director at US Bank. "The manufacturing ISM number came in strong enough — not too hot, not too cold."
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