Stocks Climb on Rate-Cut Hype

The stock market rose for a second day as a weak new-home-sales report added energy to speculation that the Fed will slash rates again next month; Bloomberg puts the odds of a quarter-point cut at 88%. The S&P added 5.96 to reach 1,531.38, climbing within 1.5% of a record. The Dow added 34.79 to 13,912.94, within 0.7% of a new record. And the Nasdaq rose 10.56 to close at 2,709.59.

Student loan company Sallie Mae had its biggest rally in five months, adding $4.11 to $49.12 on speculation that a new takeover agreement can be negotiated with J.C. Flowers & Co, which had looked like it might walk out on the foundering deal.  And jobless benefits last week fell unexpectedly, hitting their lowest level since May, in what MarketWatch said was a major factor on the bullish day. (More Dow Jones stories.)