NEW YORK (AP) - Stocks posted solid gains on Thursday as investors, comfortable that the Federal Reserve will keep interest rates low, bought up stocks that pay big dividends.
Real estate companies rose as investors looked for income, as did telecom stocks, which also typically pay higher-than-average dividends.
The Dow Jones industrial average rose 98.76 points, or 0.5 percent, to 18,392.46. The Standard & Poor's 500 index gained 14.06 points, or 0.7 percent, 2,177.18 and the Nasdaq composite climbed 44.34 points, or 0.8 percent, to 5,339.52.
The newly created real estate component of the S&P 500 climbed 1.9 percent, far more than any other sector. The group is made up largely of real estate investment trusts, which enjoy certain tax benefits by paying out much of their income as dividends.
Telecommunications stocks, which also carry a higher-than-average dividend, also rose more than the rest of the market. AT&T rose 54 cents, or 1.3 percent, to $41.11. Verizon Communications rose 48 cents, or 1 percent, to $52.35.
Trading followed a pattern that has become familiar in the last several months.
After hesitating or worrying that the Federal Reserve will raise interest rates, investors piled into high-dividend stocks following yet another Fed decision to stand pat on interest rates. The two best performing parts of the S&P 500 this year are utilities and telecoms, up 18 percent and 15 percent respectively.
"It's another example of the issues facing investors right now, particularly pension funds and retirement funds, that they are all chasing yield in the same places," said Ian Winer, co-head of equities trading at Wedbush Securities.