New York Report: S&P 500 hits a record high as rally continues

US STOCKS edged higher yesterday, with the S&P 500 closing at a record high last night, as traders awaited more clues from the Federal Reserve on whether the it would soon begin winding down its economic stimulus.

Volume was light and a volatility index fell, signalling calm among traders. The Dow industrials traded within 43.11 points from session high to intraday low, in the Dow’s tightest daily range since 17 August last year.

Speeches from a number of policymakers yesterday suggested that the Fed may be closer than previously thought to trimming its $85bn a month in bond purchases. The stimulus programme has helped drive the US stock market’s rally this year.

A recent string of strong economic data, however, has removed some of the market’s anxiety about the eventual ending of the Fed’s quantitative easing programme.

A Reuters poll showed yesterday that economists expect the Fed to begin trimming its quantitative easing programme in March, but some believe it will do so as early as this month or at the January meeting.

The policy-setting Federal Open Market Committee will hold its final meeting of 2013 on 17-18 December.

The Dow Jones industrial average rose 5.33 points or 0.03 per cent, to finish at 16,025.53. The S&P 500 gained 3.28 points or 0.18 per cent, to end at 1,808.37, a record closing high. The Nasdaq Composite added 6.23 points or 0.15 per cent, to close at 4,068.751.

The S&P 500 is up 26.8 per cent for the year. It is on track for its biggest annual gain in more than a decade.