September 18, 2013

S&P 500 Climbs as Fed Refrains From Reducing Stimulus

From Bloomberg: The S&P 500 jumped 1.2 percent to 1,725.52 at 4 p.m. in New York, erasing an earlier decline of as much as 0.3 percent. The benchmark index climbed above its all-time high of 1,709.67 reached Aug. 2. The Dow Jones Industrial Average rose 147.21 points, or 1 percent, to 15,676.94, also a record. Treasuries and gold rallied while the dollar slid. About 7.4 billion shares changed hands on U.S. exchanges, the most since June 28.

Chairman Ben S. Bernanke and his policy making colleagues refrained from paring record accommodation as rising borrowing costs show signs of slowing the four-year expansion. “The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” the Federal Open Market Committee said at the conclusion of its twoday meeting in Washington. While “downside risks” to the outlook have diminished, “the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement.”

An S&P index of 11 homebuilding stocks rallied 6 percent after declining as much as 1.4 percent before the Fed statement. Housing starts rose 0.9 percent to a 891,000 annual rate, following the prior month’s 883,000 pace that was weaker than previously estimated, the data showed. The median estimate of 83 economists surveyed by Bloomberg  called for 917,000. Permits dropped 3.8 percent. - WealthSec