August 29, 2014
Wall Street: Dow ends at record high as Fed upbeat on economy
The Dow closed at its first record high of 2014 after the Federal Reserve gave an upbeat view of the economy's prospects as it announced another cut to its massive bond-buying program.
Investors brushed aside data showing weak first-quarter economic growth, which was tied to the severe winter that hampered exports and hit investment spending.
The Fed said in a statement it would reduce its monthly bond purchases to $45 billion from $55 billion, as expected. That will keep it on track to end the program as soon as October.
Nine of the 10 S&P 500 sectors ended in the black, led by the economically-sensitive S&P materials sector, up 0.8 percent. Exxon Mobil, up 0.9 percent at $102.41, led gains on the S&P 500.
The Dow Jones industrial average rose 45.47 points or 0.27 percent, to 16,580.84, a record high close. It was the first record close of the year for the Dow.
The S&P 500 gained 5.62 points or 0.3 percent, to 1,883.95 and the Nasdaq Composite added 11.013 points or 0.27 percent, to 4,114.556.
For the month, the Dow and S&P 500 posted slight gains, while the Nasdaq dropped 2 percent following weeks of heavy selling in tech and biotech "momentum" stocks. The Dow was up 0.7 percent in April; the S&P 500 was up 0.6 percent.
Stocks were near steady for most of the session, then slowly edged to session highs following the Fed announcement.
Reports of further corporate deal-making supported European shares, despite coming under pressure following a build-up of tension in Ukraine and weak US growth data.
Alstom jumped 9.3 percent after saying it would review a binding offer from General Electric for its energy business by the end of May and left the door open for a competing bid from Germany's Siemens.
Shares in Alstom resumed trading, after being suspended since late last week.
The FTSEurofirst 300 was flat at 1,352.45 points by the close. It had jumped 1.2 percent yesterday, notching up its highest finish since April 4 when it closed at its highest in six years.
Meanwhile, Japanese shares pared much of their early gains in choppy trade after the Bank of Japan affirmed its existing policies, disappointing some speculators who had bet on the outside chance of a surprise easing.
The Nikkei ended up 0.1 percent at 14,304.11, after rising 0.9 percent earlier on the back of positive earnings guidance. It fell 3.5 percent this month, the fourth consecutive month of declines.