Stocks higher for 2nd day after Fed’s action
NEW YORK — The stock market rose again Friday because of economic help from the Federal Reserve, but even some of the buyers weren’t believers.
The Dow Jones industrial average hit its highest close since the pre-crisis days of November 2007. The Russell 2000 index of smaller companies briefly traded above its all-time closing high.
Markets rallied around the world in places where traders were getting their first chance to react to the Fed announcement; stocks climbed more than 2 percent in India and France and almost 2 percent in Japan and Germany.
The Dow rose as much as 113 points and ended up 53.51 to 13,593.37. The S&P 500 rose 5.78 to 1,465.77. The Nasdaq climbed 28.12 to 3,183.95.
Dow to drop Kraft Foods, pick up insurance company
NEW YORK — The Dow Jones industrial average is dumping Cool Whip for copays. The Dow, perhaps the most widely known barometer of the U.S. stock market, announced Friday that it would boot Kraft Foods to make room for UnitedHealth Group, the insurance company.
The change will take effect Sept. 24. S&P Dow Jones Indices, which manages the average, said it was dropping Kraft because it is about to become a much smaller company after spinning off its North American grocery business.
Credit firm lowers debt rating for U.S. to AA-
NEW YORK — Egan-Jones, an independent credit-research firm, downgraded its rating Friday on U.S. government debt to AA- from AA, citing the Federal Reserve’s plans to try to stimulate the economy.
The company said the Fed’s plans to buy mortgage bonds will likely hurt the economy more than help it.
The plan will weaken the value of the dollar and push up prices for oil and other commodities, Egan-Jones said. That would leave less for consumers to spend on other things.
SEC ends probe into Avon analyst contacts
NEW YORK — Avon Products said in a regulatory filing late Thursday that the Securities and Exchange Commission has decided it will not recommend any action against the company over whether Avon contacted analysts inappropriately during a separate bribery investigation.
The end of the investigation into analyst contacts is a plus for the company, which is trying to turn around its financial performance as new CEO Sheri McCoy settles into the job.
Industrial production fell 1.2 percent in August
WASHINGTON — U.S. industrial production fell in August by the largest amount in more than three years as factories produced fewer cars and other manufactured goods and Hurricane Isaac triggered shutdowns along the Gulf Coast.
Industrial production dropped 1.2 percent last month compared to July, the Federal Reserve said Friday. It was the biggest setback since a 1.7 percent decline in March 2009, when the country was in recession.
Manufacturing output, the most important component of industrial production, fell 0.7 percent, led by a 4 percent drop in output at auto plants.
Bank failure in Missouri brings 2012 total to 42
WASHINGTON — Regulators closed a small bank in Missouri on Friday, bringing to 42 the number of U.S. bank failures this year.
The Federal Deposit Insurance Corp. said it seized Truman Bank, based in St. Louis. The bank had about $282.3 million in assets and $245.7 million in deposits as of June 30. Simmons First National Bank, based in Pine Bluff, Ark., agreed to assume Truman Bank’s deposits and purchase essentially all of the failed lender’s assets.