Closing Bell: Markets Hit Record Highs After Fed Stands Pat on Stimulus

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Wall Street
Richard Drew/AP
Stocks soared Wednesday after the Federal Reserve said it was sticking by its $85 billion in monthly bond purchases, surprising investors who were braced for a reduction in the stimulus program.

The Dow Jones industrial average (^DJI) jumped 147 points, or 1 percent, to 15,676, the Standard & Poor's 500 index (^GPSC) advanced 20 points, or 1.2 percent, to 1,725 -- both of which were record highs -- and the Nasdaq composite index (^IXIC) gained 38 points, or 1.2 percent, to 3,783.

In a statement, Fed policymakers voted to maintain the central bank's $85 billion-a-month bond-buying program, which has been in place in one form or another since late 2008. The bank said that while the U.S. economy was improving, policymakers "decided to await more evidence that progress will be sustained" before deciding to cut back.

Bond yields plunged on the news: The yield on the 10-year Treasury note fell from 2.85 percent to 2.71 percent, its biggest single-day drop in almost two years.

The market had been in a holding pattern before the Fed released its policy statement at 2 p.m. Eastern time. Moments before the decision was announced, the Standard & Poor's 500 was little changed from its close the day before.

The fate of the Fed's economic stimulus program has been the biggest question on Wall Street for months. It was widely expected that the Fed would cut back on its bond buying at its September meeting.



In regulatory news, the Securities and Exchange Commission voted 3-2 to propose a rule that would compel companies to report the difference in pay between their CEOs and ordinary employees. Employers would have to report the ratio between their chief executive's annual compensation and the median, or midpoint, pay of employees. Business groups oppose the idea, saying it would add to costs. The SEC opened the proposal to public comment for 60 days; it could be formally adopted sometime after that.

In commodities news, the price of gold jumped 4 percent to $1,361,80 an ounce on inflation fears, while benchmark U.S. crude oil rose 2.5 percent to $108.07 a barrel, it's largest price jump in three weeks.

In corporate news, shares of General Mills (GIS) moved lower most of the day, after the maker of Cheerios and Yoplait yogurt reported its earnings fell in its fiscal first quarter compared to the same period a year ago. For the three months ended Aug. 5, the company said it earned $459.3 million, or 70 cents a share, which was in line with analyst expectations. Last year, the company earned $548.9 million, or 82 cents a share. In its overall U.S. retail business, General Mills said sales rose 4 percent to $2.58 billion, as the company scrambled to catch up with the booming popularity of Greek yogurt by rolling out Greek versions of its Yoplait yogurt. However, buoyed by the Fed report, the stock recovered sharply to end the day up 0.8 percent to $50.16

More Stocks in the News:
  • Struggling smartphone maker BlackBerry (BBRY) could cut its workforce by up to 40 percent by the end of the year, according to The Wall Street Journal. The newspaper said that the Canadian company plans to make the cuts through layoffs that will occur in all of its departments, potentially affecting several thousand people.
  • Newmont Mining (NEM) jumped 8.2 percent to $30.87, as materials stocks rallied after the dollar fell to a seven-month low versus the euro after the Fed announcement.
  • Adobe Systems (ADBE) climbed 9.2 percent to $52.58 after the company said it added more subscribers to its "Creative Cloud" software service than previously anticipated.
  • FedEx (FDX) rose 5 percent to $116.24 after the company reported a 7 percent increase in quarterly profit, helped by strong earnings in its ground-shipping business.
  • Shares of BioMarin Pharmaceutical (BMRN) rose 2 percent to $77.50 after analysts praised the company's drug pipeline. Shares touched a new high of $77.78 as stocks rallied following the Fed's announcement.
What to Watch Thursday:
  • At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims and the Commerce Department releases current account trade deficit for the second quarter.
  • At 10 a.m., Freddie Mac releases weekly mortgage rates; the Conference Board releases leading indicators for August; and the National Association of Realtors releases existing home sales for August.
These major companies are scheduled to report quarterly corporate earnings:
  • ConAgra Foods (CAG)
  • Pier 1 Imports (PIR)
  • Rite Aid (RAD)
-Compiled from staff and wire reports.

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37 Comments

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aftonmoon

Think of what this means. Stock prices rise with the knowledge and affirmation by the Fed that the real economy is weak so its quantitative easing and support for the Banking and financial industry forever and permitting them to gamble while covering the losses of the bad bets as the rest of the economy limps along with lowering or stagnant wages and expectations. And for those who look at their 401ks and think they are back to their old value remember that Wall Street is driven by computer trading that can take place in fractions of a second so while rules prevent you from split second trading with your 401ks the crooks will have run off with your contributions before you can put your hands on your money. The more I see of Ben Bernake the better Madame Lafage looks. And lastly we must remember that even the Fed has a limit beyond which it can go before it has to go to the World Bank for a bailout.

September 19 2013 at 6:55 AM Report abuse +2 rate up rate down Reply
mac2jr

Answers to both are D....

September 19 2013 at 2:33 AM Report abuse +1 rate up rate down Reply
1 reply to mac2jr's comment
ordobtrebla

You only asked one question...
Bud you say the answer to both are 'D"

September 19 2013 at 3:36 AM Report abuse -1 rate up rate down Reply
mac2jr

Where is the biggest Casino in the world?

A) Atlantic City, New Jersey
B) On a Native American Reservation in New Mexico
C) Las Vegas, Nevada
D) New York City, New York

Your Answer is?

September 19 2013 at 2:33 AM Report abuse rate up rate down Reply
mac2jr

What is the reason for the Wall Street Stock Market?

A) to make money for the investors
B) to make money for the stock brokers
C) to make money for the computer operators and technicians
D) to provide revenue sources for companies that want to expand and increase profits.

Your answer is : ________

September 19 2013 at 2:30 AM Report abuse rate up rate down Reply
michael_vici

中国隐秘共产党从我身上做了二十年人性精神虐待试验,那么牛的人做那么超级流氓下贱的事情,用功能非常强大的纳米分子控制着虐待一个我这样的普通人。做一些下贱不要脸像癞皮狗一样粘着你贴住你去一点点虐待。把人当成畜生一样去虐待。过去的太多事实我就不说了。现在居然用纳米分子控制着我去虐待我一岁半的孩子,成天不给他好脸看,还动不动就打他,他才一岁半啊,什么事都还不懂来。中国隐秘共产党简直连畜生都不如。根据以前的事实也证明了这一点是对的。动不动就又捏又扭的,今天还扇了他耳光。隐秘共产党就控制着我做这样的事了,还有没有规矩王法,我发自内心的想说:“隐秘共产党必亡,中国必亡。”中国凭什么变得强大,就凭这样虐待人的事情吗?我的电脑上有录音。

September 18 2013 at 11:42 PM Report abuse -3 rate up rate down Reply
michael_vici

Chinese Communist secret from me to do two years of human mental abuse test, then cattle people to do something so vile rogue super, with very powerful nano-molecules control the abuse of an ordinary person like me. Do some abject shame stick to you like a mangy dog stick as you go a little abuse. Uncomfortable past every day, every day, insomnia, primarily the spine, heart and head are controlled and carried out to match the color Chuhuo mental abuse. Now my head is completely under control, nano-molecules emit gases or liquids to carry some form of control of the head, and can produce images and sound, the main part of the mind under control, to bring the brain to think about , let's think about some of the tangled brain unimportant, do not want to not work, every day. Secretive Communist Party does not suddenly get hurt me, let me a little uncomfortable I gradually pressurized. My head knew uncomfortable uncomfortable, but no feelings, to react. As a numb has no feeling like those people to bear. Eyes seemed to be divided into several pieces the same. Eyes emit atheism. Obviously felt inside the eye is out of control. The main thing is my head can not think of other things, no idea, all day long to be brought under control, the overall feeling is like the head outside distribute shaped restless, Shen does not survive. The idea is entangled in all those little things, I am alive, what significance. There are no rules Fa, I really can not stand. My phone number: 13853788002 (China)

September 18 2013 at 11:41 PM Report abuse -3 rate up rate down Reply
1 reply to michael_vici's comment
mac2jr

I'll have some of what he's having....

September 19 2013 at 2:25 AM Report abuse rate up rate down Reply
tvndstr22

All i see is the fed creating a bubble so big, that once it will burst our financial problems will be over. And we can all focus on simple survival. This will put us all on an even keel.

September 18 2013 at 11:23 PM Report abuse -1 rate up rate down Reply
nflamingo

The rich are getting richer and the middle class is going to the poor side....about 50 plus years ago, my grandmother said one day there will rich and poor, no one in the middle. Never thought I would see it and sliding to the poor side.

September 18 2013 at 11:06 PM Report abuse +1 rate up rate down Reply
white

ok getting on the wall st. ride, thats were all the $$$ is. stop blaming the fed. and lets make that $$$$$$$s

September 18 2013 at 10:49 PM Report abuse -4 rate up rate down Reply
1 reply to white's comment
betty_brock

You don't see a problem with flooding the country with trillions in unbacked dollars?

September 18 2013 at 11:02 PM Report abuse rate up rate down Reply
betty_brock

Evan has a dozen nutty new screen names.

September 18 2013 at 10:11 PM Report abuse +1 rate up rate down Reply