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December 14, 2017
Thursday, September 18, 2014

Dow, S&P 500 at records as Fed-driven rally continues

US stocks rose today, a day after the US Federal Reserve kept intact its pledge to keep interest rates low, providing a backstop for investors that helped lift both the Dow and S&P to record highs.

The Fed said Wednesday at the conclusion of a two-day policy meeting it would keep interest rates near zero for a "considerable time," language supportive of equities which some had expected to be dropped from the statement.

The central bank's outlook on Wednesday included forecasts for higher-than-expected rates in 2015 and 2016, which helped financial stocks rise 1.1 percent, leading the day's gains on Wall Street. Goldman Sachs rose 1.7 percent to $187.89, the biggest boost to the Dow.

US equity markets have rallied for three consecutive sessions as the Fed's stance eased investor worries the central bank was ready to pivot away from its years-long policy of holding rates at rock bottom levels, which stimulated demand for risk assets like stocks.

That support has lifted the benchmark S&P 500 to 34 records in 2014, and has helped markets sidestep a 10-percent "correction" for almost three years, even while individual market sectors have seen multiple pullbacks.

US housing starts and permits fell in August, but upward revisions to the prior month's data indicated gradual improvement in the housing market. A sharp drop in the number of Americans filing new claims for unemployment benefits last week suggested the slowdown in job growth last month was probably an anomaly.

The Dow Jones industrial average closed up 109.14 points, or 0.64 percent, to 17,265.99, the S&P 500 added 9.79 points, or 0.49 percent, to 2,011.36, and the Nasdaq Composite gained 31.24 points, or 0.68 percent, to 4,593.43.

Advancing issues outnumbered decliners on the NYSE by 1,845 to 1,200, for a 1.54-to-1 ratio on the upside; on the Nasdaq, 1,622 issues rose and 1,083 fell for a 1.50-to-1 ratio favoring advancers.

The S&P 500 posted 56 new 52-week highs and 8 new lows; the Nasdaq Composite had 85 new highs and 64 new lows.

Volume was active, with about 5.88 billion shares traded on US exchanges, slightly above the 5.69 billion average so far this month, according to BATS Global Markets.

Meanwhile, European equities closed higher, with a key index climbing to a two week high after the US Federal Reserve renewed its pledge to keep interest rates ultra-low for a considerable time.

However, British shares slightly underperformed as voting got underway in Scotland's referendum on independence, keeping investors on edge ahead of the result on Friday.

The FTSEurofirst 300 index of top European shares ended 0.9 percent firmer at 1,398.03 points after rising up to 1,399.96, its highest since early September. Britain's FTSE rose 0.6 percent, Germany's DAX index gained 1.4 percent and France's CAC 40 rose 0.8 percent.

Equities also got some lift after the European Central Bank drew far less demand than expected for its new four-year loans to banks (TLTROs), raising expectations it may eventually opt for more radical monetary stimulus measures.

Germany's Bayer added 6.2 percent after saying it plans to float its plastics business on the stock market, a unit with an estimated value of about 8 billion euros ($10 billion).

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  





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