Stocks climb on rate-cut optimism

NEW YORK — Wall Street shook off early uncertainty to close moderately higher Thursday as mixed economic reports managed to make investors more optimistic about the chances for an interest-rate cut.

The Dow Jones industrial average closed up 57.88 to 13,363.35, after wobbling in and out of positive territory.

Microsoft, one of the 30 Dow stocks, gained 43 cents to close at $28.91. Boeing, also a Dow stock, added 36 cents to $96.20.

Broader stock indicators also lifted. The Standard & Poor's 500 index rose 6.26 to 1,478.55, and the Nasdaq composite index rose 8.37 to 2,614.32.

The market was uneasy after the Mortgage Bankers Association said homeowners beginning the foreclosure process in the second quarter reached a record 0.65 percent. It was the third consecutive quarter the figure reached a new high.

Investors want growth to be slow enough to merit a rate cut when the Federal Reserve meets Sept. 18, but they don't want to see the economy weaken to the point of recession.

Investors later gleaned some reason for optimism from comments from Dallas Federal Reserve President Richard Fisher, who said inflationary pressures are "increasingly well behaved," and that the central bank is "listening carefully" to business conditions.

St. Louis Fed President William Poole made similar comments earlier in the day.

"They didn't explicitly say they were going to cut rates, but some of the talk from the day gave reason to believe they may be leaning that way," said Todd Salamone, director of trading at Schaeffer's Investment Research.

"The market is driven by words from the Fed that reinforces the idea they'll step up if necessary, and it is also very much data driven," he said.

Reports on the job market, service sector and August retail sales did not disappoint. Last week, for the first time in seven weeks, claims for unemployment benefits dropped, the Labor Department said.

Those snapshots bode well for today's August employment report, the economic reading that investors consider the most important this week.