Dow surges again, erasing 216-point drop on Monday

The Dow came within 60 points of its all-time high Wednesday, rising sharply for a second straight day.

The market surged following more evidence that the Fed will keep interest rates low, housing will keep recovering and shoppers aren’t pulling back on spending, though they’re paying more in Social Security taxes this year.

The gains were broad: Twenty-nine of 30 stocks in the Dow Jones industrial average rose. All 10 industries in the Standard and Poor’s 500 index climbed.

The Dow Jones industrial average closed up 175.24 points, or 1.2 percent, to 14,075.37. The index is now 89 points from its record close of 14,164.53, in October 2007.

The Dow has surged 290 points in the past two days, erasing its drop of 216 points Monday when inconclusive results from an election in Italy renewed worries about Europe’s fiscal crisis.

The Standard and Poor’s 500 index gained 19.05 points, or 1.3 percent, to 1,515.99. That put it within 49 points of its record close of 1,565, also in October of 2007.

The Nasdaq composite rose 32.61 points, or 1.3 percent, to 3,162.26.

Apple CEO tries to reassure shareholders as stock dips

Apple CEO Tim Cook sought to reassure shareholders worried about the company’s sagging stock price that the iPhone and iPad maker is on the verge of inventing more breakthrough products that will prove it hasn’t lost its creative edge.

The company is working as hard as ever, and we have some great stuff coming,” Cook told shareholders Wednesday before taking their questions during Apple’s annual meeting at its Cupertino, Calif., headquarters.

True to Apple’s secretive nature, Cook didn’t provide any further product details, although at one point he said the company is considering entering other categories besides its popular line of digital music players, smartphones and tablet computers.

Core capital goods orders rise 6.3 percent in January

Orders for U.S. factory goods that signal business investment plans jumped last month by the most in more than a year, suggesting companies are confident about their business prospects.

The Commerce Department said Wednesday that orders for so-called core capital goods, which include industrial machinery, construction equipment and computers, rose 6.3 percent in January from December. A sharp fall in demand for commercial aircraft caused overall durable goods orders to drop 5.2 percent, the first decline since August.

Orders for commercial aircraft are volatile and can cause large swings in the overall figure.

Pending home sales index at highest since April 2010

A measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than 2.5 years. The increase suggests sales of previously occupied homes will continue rising in the coming months.

The National Association of Realtors said Wednesday that its seasonally adjusted index for pending home sales rose 4.5 percent last month to 105.9. That’s the highest since April 2010, when a home buyer’s tax credit was about to expire.

Bond purchases needed, Bernanke tells lawmakers

Facing criticism from Republican lawmakers, Chairman Ben Bernanke stood behind the Federal Reserve’s low-interest-rate policies Wednesday and sought to reassure members of Congress that the central bank has a handle on the risks.

In his second day of testimony on Capitol Hill, Bernanke told members of the House Financial Services Committee that the Fed’s bond purchases are needed to boost a still-weak economy and that they have helped create jobs for average Americans.

— From news service reports