Wall Street Ends With A New Record
US stocks rose, sending the S&P 500 to a record, as the Federal Reserve said today that growth is bouncing back and once again stated that interest rates will remain low for a “considerable time.”
By Paolo Palazzi-Xirinachs
Thursday, June 19, 2014 - 00:00
The S&P 500 rose 0.7% to 1,956.27 at 4 p.m. in New York, gaining for a fourth straight day. The Dow added 92.35 points, or 0.6%, to 16,900.84, and the Nasdaq jumped 0.6%, poised for the highest closing level since 2000. Trading in S&P 500 companies was 9 % above the 30-day average for this time of day. Adding fuel to the rally, economic data earlier this week showed that the cost of living in the US rose more than forecast in May. The consumer price index increased 0.4%, the biggest advance since February 2013, a Labor Department report showed. A pickup in inflation lessens the threat of a prolonged drop in prices that hurts economic growth, giving Fed officials reason to continue to scale back their unprecedented stimulus program.
The Fed trimmed bond-buying by $10 billion for a fifth straight meeting, to $35 billion, keeping it on pace to end the program late this year. The policy-making Federal Open Market Committee repeated it’s likely to reduce the pace of asset purchases in further measured steps, and that it expects rates to stay low for a “considerable time” after the bond-buying ends. Fed Chair Janet Yellen and her fellow policy makers are debating how long to keep interest rates near zero as the US labor market improves and inflation moves closer to the Fed’s 2% goal. “Economic activity is rebounding in the current quarter and will continue to expand at a moderate pace thereafter,” Yellen said at a press conference this afternoon. She also said easy Fed policy, rising home and equity prices and an improving global economy are some factors that should produce above-trend growth.
In other market news, FedEx jumped 6.2% to $148.95 as the company forecast an annual profit that topped some analysts’ projections as it reaps the benefits of a 20-month push to reduce costs and a global economic recovery that’s spurring an increase in shipping. FedEx’s fiscal fourth-quarter profit and revenue topped estimates. Adobe rallied 8.1% to $73.03. The software maker attracted online subscribers at a faster-than-projected rate, returning the company to revenue growth for the first time in six quarters. Walgreen Co. rose 3.8 % to $75.88. Amazon.com shares jumped 2.9% to $334.93 after Chief Executive Officer Jeff Bezos unveiled a "Fire" smartphone with free, unlimited photo storage, jumping into a crowded field dominated by Apple Inc. and Samsung Electronics.
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