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Overnight Markets: Wall Street at record highs after Fed leaves stimulus intact
by Himanshu Singh on Sep 19, 2013 at 03:43
US stocks surged to record highs after the Federal Reserve unexpectedly decided against scaling back a stimulus programme that has helped fuel Wall Street's rally of more than 20% this year.
The Dow Jones industrial average rose 147 points or 0.95%, to 15,677, the S&P 500 gained 21 points or 1.22%, to 1,726 and the Nasdaq Composite added 38 points or 1.01%, to 3,784.
Markets started on a lower note yesterday, but after the Fed announced it would continue buying bonds at an $85 billion monthly pace for now, the Dow and S&P 500 indexes quickly climbed to all-time highs. Investors had largely been expecting the central bank to begin a withdrawal of the bond-buying programme by about $10 billion a month.
The Fed also lowered its forecasts for economic growth. It now sees growth in a 2% to 2.3% range this year, down from 2.3% to 2.6% in its June estimates.
Separately, a White House official said Fed Vice-Chairwoman Janet Yellen was the front runner to take over the top job at the US central bank when Bernanke's term ends in January.
In company news, Priceline.com Inc (PCLN.O) hit an intraday high of $1001, the first S&P 500 company in history to reach that landmark level. Shares in the online travel agency closed up 2.6% at $995.09.
Materials stocks rallied as the US dollar plunged to a seven-month low and gold rallied after the announcement. Newmont Mining Corp (NEM.N) surged 8.2%, while Barrick Gold jumped 9.7%. Cliffs Natural Resources Inc., the largest US iron-ore producer, added 4.7%.
Homebuilder stocks also jumped with Lennar Corp (LEN.N) advancing 6.5% and D.R. Horton Inc (DHI.N) jumping 6.9%. PulteGroup Inc. added 5.5%.
Elsewhere, FedEx Corp. (FDX) rose 5% after earnings topped estimates. Adobe Systems Inc. rallied 9.2% after the company said the number of Web subscribers jumped 47% in the fiscal third quarter.
In Asia, shares jumped on Thursday in morning trade after the US Fed unexpectedly refrained from cutting economic stimulus.
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