S&P 500, Dow extend gains following Fed statement

S&P 500, Dow extend gains following Fed statement

The S&P 500 and Dow Jones indexes rose on Wednesday on hopes that the Federal Reserve would continue to keep interest rates low for a prolonged period, while a slide in tech-related stocks weighed on the Nasdaq.

FILE PHOTO: A man walks a dog in the shade past the New York Stock Exchange (NYSE) during hot weath
FILE PHOTO: A man walks a dog in the shade away from the midday sun past the New York Stock Exchange (NYSE) building in Manhattan, during hot weather in New York City, New York, U.S., August 11, 2020. REUTERS/Mike Segar/File Photo

REUTERS: The Dow and S&P 500 added to gains on Wednesday after the U.S. Federal Reserve delivered a policy statement that bolstered expectations it will keep interest rates near zero for a prolonged period.

The Dow rose more than 1per cent and the Nasdaq turned positive after the the Fed kept rates near zero and promised to keep them near there until inflation is on track to "moderately exceed" the U.S. central bank's 2per cent inflation target "for some time."

The central bank's two-day meeting is its first under a newly adopted framework that promises to shoot for inflation above 2per cent to make up for periods where it runs below that target.

"We've come a long way from (President Donald) Trump saying the Fed is 'loco' for raising rates. The Fed is clearly now offering unbridled support for markets and the economy," said David Carter,  chief investment officer at Lenox Wealth Advisors in New York.

The Dow Jones Industrial Average rose 291.63 points, or 1.04per cent, to 28,287.23, the S&P 500 gained 21.08 points, or 0.62per cent, to 3,422.28 and the Nasdaq Composite added 20.80 points, or 0.19per cent, to 11,211.12.

The S&P 500 and Dow were modestly higher before the statement, while the Nasdaq was lower.

(Additional reporting by Stephen Culp in New York and Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and David Gregorio)

Source: Reuters