Stocks Rally on Summers Defeat

Stocks are rallying today on news that former Treasury Secretary Lawrence Summers won’t become the next chairman of the Federal Reserve. Janet Yellen, now the leading the contender, is considered less likely to reduce monetary stimulus in the near term.

S&P 500 futures are surging more than 1 percent, exceeding most of the gains in Europe. Asia was mostly higher, led by Thailand, Singapore, and Hong Kong. (Tokyo was closed for a holiday.) Interest rates are falling as well, sending the U.S. dollar lower.

The S&P 500 spent the last three days in a tight range after climbing in early September. Today’s rallying brings the index back to striking distance of its previous all-time high near 1710 at the beginning of August. Sentiment has remained buoyant toward stocks on mounting evidence of a stronger global economy and as investors continue to buy pullbacks.

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