S&P 500 hits new record after Fed stays policy course

Federal Reserve Chair Janet Yellen’s news conference appears on a television monitor on the floor of the New York Stock Exchange on Wednesday, June 18, 2014. The S&P 500 Wednesday bolted to a new record after the Federal Reserve kept its policy of ultra-low interest rates and did not accelerate the time frame for raising them. AP

NEW YORK–The S&P 500 Wednesday bolted to a new record after the Federal Reserve kept its policy of ultra-low interest rates and did not accelerate the time frame for raising them.

The S&P 500, a broad measure of the US stock markets, jumped 14.99 points (0.77 percent) to 1,956.98.

The Dow Jones Industrial Average gained 98.13 (0.58 percent) to 16,906.62, while the tech-rich Nasdaq Composite Index advanced 25.60 (0.59 percent) to 4,362.84.

All three indices rose after the Fed issued a statement at 1800 GMT that reiterated its policy of tapering stimulus while keeping monetary policy “highly accommodative.” The gains became more pronounced throughout a press conference with Fed Chair Janet Yellen that began a half hour later.

Yellen told reporters there “is no mechanical formula” for when the Fed will lift benchmark interest rates following the end of stimulus, suggesting the central bank’s time frame for the hike remains in the middle of 2015.

Analysts also noted that the Fed statement did not significantly increase its inflation forecast, “suggesting that the recent pickup in inflation doesn’t materially change its near-term outlook for monetary policy,” said a note from IHS.

Michael James, managing director of equity trading at Wedbush Securities, said Yellen’s remarks contained no shockers.

“There was concern that the interest rate policy could have been more negative than what she laid out,” James said.

“There wasn’t anything negative said to make the uptrend that we’ve seen in equities change direction.”

Amazon jumped 2.7 percent as it launched the eagerly anticipated “Fire Phone,” a 4.7 inch (11.9 centimeter) smartphone that links into other Amazon offerings, such as books, films and music. Analysts said the phone could solidify the online retailer’s ties with its consumers.

Package-delivery company FedEx shot up 6.2 percent as fiscal fourth-quarter earnings of $2.46 per share bested expectations by 10 cents. The results were boosted by higher shipping volumes and lower operating expenses.

Software company Adobe jumped 8.2 percent as second-quarter earnings rose 15.7 percent to $88.5 million on higher subscriptions to its “Creative Cloud” service. Revenues of $1.07 billion also exceeded the company’s forecast of $1.00-$1.05 billion.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.61 percent from 2.66 percent Tuesday, while the 30-year declined to 3.42 percent from 3.45 percent. Bond prices and yields move inversely.