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Stocks rise as Federal Reserve convenes

Stocks rose on Wall Street Tuesday as investors shrugged off worries over the Federal Reserve's $85 billion monthly bond-buying program. Technology stocks led gains in the Standard & Poor's 500 index.

By Joshua FreedAP Business Writer / September 17, 2013

Traders work on the floor of the New York Stock Exchange.

Brendan McDermid/Reuters/File

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Stocks rose on Tuesday as investors shrugged off worries about what the Federal Reserve is up to.

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Many expect the Fed to announce Wednesday that it will reduce its $85 billion monthly bond-buying program. Wall Street is hoping for a small reduction because the bond-buying has kept interest rates ultra-low and made it cheaper to borrow money.

The Dow Jones industrial average closed higher by 34.95 points, or 0.2 percent, at 15,529.73.

The Standard & Poor's 500 index rose 7.16 points, or 0.4 percent, to 1,704.76. The S&P 500 was five points below its record high reached on Aug. 2. It has risen for three trading days in a row, and 10 of the last 11.

The Nasdaq composite was up 27.85 points, or 0.8 percent, at 3,745.70; it had the biggest percentage gain of the three big indexes.

Nine out of 10 industry groups in the S&P 500 rose, led by technology. The only declines were for materials stocks, which include miners, industrial gas producers and metal refiners.

Rising tech stocks included the video game company Electronic Arts, which is getting a solid start with this year's version of its Madden football franchise. Electronic Arts rose 64 cents, or 2 percent, to $27.60.

Computer memory maker Micron Technology rose 40 cents, or 2 percent, to $16.84 as investors bet that memory prices will rise after a fire shut down a competitor's factory in China.

By some measures, stock market values are as high as they were at the end of the Internet bubble in 2000, when compared to the size of the nation's economy, said Martin Leclerc, a principal and chief investment officer at Barrack Yard Advisors in Bryn Mawr, Pennsylvania.

Then, there was at least the justification of new technology.

"Now, the only justification we have is cheap money," Leclerc said.

Nonetheless, Leclerc said, with a bull market underway stocks could keep climbing regardless of valuations. "This thing is a powerful beast," he said. The current bull market is four-and-a-half years old.

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