Dow climbs 123 at close

US investors anxious to get back into the stock market pounced on Federal Reserve Chairman Alan Greenspan’s bullish economic report today, sending stocks soaring and propelling the Dow Jones industrial average up 123 points to its highest level in more than two-and-a-half years.

Greenspan, in testimony before a House committee, gave a better-than-expected assessment of inflation and the overall economy and reiterated the Fed’s current stance that it could remain patient before eventually raising interest rates.

The Dow Jones industrial average gained 123.85, or 1.2%, to 10,737.70.

It was the highest the Dow has been since June 13, 2001, and is less than 1,000 points shy of the index’s record close of 11,722.98, set on January 14, 2000.

Broader stock indicators also rose sharply. The Standard & Poor’s 500 index was up 12.22, or 1.1%, at 1,157.76. The Nasdaq composite index climbed 14.33, or 0.7%, to 2,089.66.

Stocks drew the most momentum from the Fed’s lowered inflation estimate, which fell by 0.25 percentage point from its projection of last July.