Trader F. Hill Creekmore works on the floor of the New York Stock Exchange Wednesday, Sept. 18, 2013. The stock market hit a record high Wednesday after the Federal Reserve’s surprise decision to keep its economic stimulus in place. AP PHOTO/RICHARD DREW
NEW YORK CITY—US stocks soared Wednesday to all-time closing highs after the Federal Reserve left its huge monetary stimulus in place.
The Dow Jones Industrial Average jumped 147.21 (0.95 percent) to 15,676.94, 18 points above the previous record set on Aug. 2.
The broad-based S&P 500 surged 20.76 (1.22 percent) to 1,725.52, besting the previous high, also hit on Aug. 2, by nearly 16 points.
The tech-rich Nasdaq Composite Index rose 37.94 (1.01 percent) to 3,783.64.
All three indices had been trading lower before the Fed’s policy statement at 1800 GMT.
The Fed surprised markets by deciding not to dial back its $85 billion per month bond-buying program. Many market-watchers had expected the Fed to trim the program by $10-$15 billion per month.
The Fed cut its economic growth forecast for this year and next and expressed concern that the recent sharp rise in interest rates had already slowed the economy.
“The committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall,” it said at the end of a two-day monetary policy meeting.
“But the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market.”
Besides vaulting stocks higher, the Fed news sent the dollar lower against other major currencies and pushed US Treasury bond yields lower.
“The market is celebrating the fact that the Fed is sticking to data dependency and that real yields are coming down,” said Art Hogan, head of product strategy at Lazard Capital Markets.
Home builders, including PulteGroup (up 5.5 percent) and Lennar (up 6.5 percent), advanced in anticipation that lower interest rates will support the housing sector.
Utilities, which are known for offering a generous dividend, rose as bond yields dropped. Southern Company gained 3.6 percent, while American Electric Power rose 3.7 percent.
Mining companies like Newmont (up 8.2 percent) and Goldcorp (up 8.2 percent) gained as copper and gold prices rallied on the Fed news.
Apple tacked on 2.1 percent after putting on the market its new mobile operating system, called iOS 7.
Priceline became the first equity in the S&P 500 to trade above $1,000 when it spiked to $1,001 in late-session trade. Priceline closed at $995.09, up 2.6 percent.
Bond prices tumbled. The yield on the 10-year Treasury sank to 2.71 percent from 2.85 percent Tuesday, while the 30-year fell to 3.75 percent from 3.84 percent. Prices and yields move inversely.