Dow Jones:12,690.96 (+95.59) S&P 500:1,355.66 (+8.42) Nasdaq:2,863.02 (+15.48)
US STOCKS rose yesterday, giving the Standard and Poor’s 500 Index the fifth gain in six days, as the Federal Reserve renewed its pledge to stimulate growth with low rates and said a temporary pick-up in inflation is likely.
General Electric added 2.7 per cent after saying it wants to continue to boost its dividend.
Moody’s, whose founder John Moody created credit ratings more than a century ago, climbed 6.7 per cent as profit beat estimates by 25 per cent.
Baker Hughes rallied 4.4 per cent after reporting earnings that beat analysts’ estimates.
The Dow Jones industrial average gained 95.59 points, or 0.76 percent, to 12,690.96.
The Standard & Poor’s 500 Index rose 8.42 points, or 0.62 per cent, to 1,355.66.
The Nasdaq Composite Index climbed 15.48 points, or 0.54 per cent, to 2,863.02.
Boeing, a Dow component, rose 0.8 per cent to $76.12.
Whirlpool gained 0.9 per cent to $88.65 and WellPoint added 3.5 per cent to $75.54.
The Fed left its benchmark interest rate in a range of zero to 0.25 per cent and retained a pledge in place since March 2009 to keep it “exceptionally low” for an “extended period”.
“It’s a sigh of relief,” said Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina, which manages $4 billion.
“The Fed kept the language. At least for the rest of this year and into next year, we see accommodative policy. In addition, there’s a perception that the signs of inflation are fairly tamed at this juncture. That’s another positive. Before the announcement, we also got good corporate earnings releases. So, that combination is lifting the equity markets at this point,” he said.
Earnings per share beat estimates at 77 per cent of the 197 companies in the SP 500 that have reported quarterly results since April 11th, according to Bloomberg.
Mr Bernanke has signalled he will maintain record stimulus until job growth accelerates and the recovery is robust enough to withstand tighter credit.
The Fed chief has said he expects that a surge this year in fuel and food costs will have only a passing inflationary impact. – (Bloomberg/Reuters)
