After showing a lack of direction throughout morning trading on Thursday, stocks moved substantially higher in the afternoon amid a positive reaction to the Federal Reserve's highly anticipated monetary policy announcement.
The rally on Wall Street came after the Fed announced a plan to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.
Most of the major sectors moved notably higher following the release of the Fed statement, reflecting broad based buying interest.
Gold stocks posted particularly strong gains, benefiting from a sharp increase by the price of the precious metal. With gold for December delivery jumping $38.40 to $1,772.10 an ounce, the NYSE Arca Gold Bugs Index surged up by 4.9 percent.
Considerable strength also emerged among banking stocks, as reflected by the 2.8 percent gain posted by the KBW Bank Index. With the gain, the index reached its best closing level in well over a year.
Steel stocks also showed a strong move to the upside, driving the NYSE Arca Steel Index up by 3.7 percent to a four-month closing high. Oil, chemical, telecom, and housing stocks also posted notable gains on the day.
The major averages moved roughly sideways going into the close, ending the day sharply higher. The Dow jumped 206.51 points or 1.6 percent to 13,539.86, the Nasdaq surged up 41.52 points or 1.3 percent to 3,155.83 and the S&P 500 soared 23.43 points or 1.6 percent to 1,459.99.
With the strong gains on the day, the Dow and the S&P 500 reached their best closing levels in well over four years, while the Nasdaq reached a nearly twelve-year closing high.
by RTT Staff Writer
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