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Friday, September 16, 2011

US Stock rally on European aid plan (ext.)

NEW YORK (CNNMoney) -- U.S. stocks closed higher for a fourth consecutive day Thursday as bank stocks led the market higher following a coordinated effort by five central banks to help ward off a credit crisis in Europe.

The European Central Bank, the U.S. Federal Reserve and three other major central banks agreed to step in to boost dollar liquidity for banks in Europe.

The Dow Jones industrial average (INDU) rose 186 points, or 1.6%, to 11,433. The S&P 500 (SPX) added 20 points, or 1.7%, to 1,209. The Nasdaq (COMP) ticked up 34 points, or 1.3%, to 2,607.

While the markets cheered the central banks' move, investors were still cautious about the long-term outlook for Europe's debt crisis.

"It's good news in the short term, but as long as the central banks are jumping through hoops to alleviate market pressures, it provides less incentive for governments to reform," said Jack Ablin, chief investment officer with Harris Private Bank. "It's not a long-term solution and ultimately forestalls real reform."

Paul Zemksy, head of asset allocation at ING Investment Management, said the market could test the highs it hit at the end of August.

"But I don't think we'll go much higher than that," he added. "We've still got a pretty soggy economy."

Economic data released Thursday underscored the mixed outlook for the United States, where a lack of business and consumer confidence has weighed on growth.

The dollar fell against the euro and the British pound and the Japanese yen.

Oil for October delivery gained 49 cents to settle at $89.40 a barrel.

Gold futures for December delivery fell $45.10 to close at $1,781.40 an ounce.

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