NEW YORK REPORT
US stocks climbed yesterday, with the S&P 500 snapping a three-day losing streak as the Federal Reserve reassured investors that it would keep supporting the economy.
The housing sector’s stocks ranked among the best performers after Lennar reported a first-quarter profit well above analysts’ expectations as lower interest rates and rising rents increased home sales.
The Dow hit an intraday record high but fell short of closing at another record. The view that the Fed will keep interest rates at record lows for years has helped drive the rally in stocks this year, along with signs of a strengthening US recovery.
In its statement, the Fed said it would stick to its $85bn monthly bond-buying stimulus, citing still high unemployment levels, but said it would take into account the possible risks of its policies.
The statement, and comments by Fed chairman Ben Bernanke, came as the market grapples with banking woes in Cyprus, the most recent flare-up in the Eurozone debt crisis and a tax on bank deposits, which had been proposed over the weekend by European Union officials. Investors worry that a collapse of the banking system in
Cyprus will tighten credit across Europe and become another hurdle in the region's bumpy road out of economic crisis.
The Dow Jones industrial average gained 55.91 points, or 0.39 per cent, to end at 14,511.73, after rising as high as 14,546.82, an intraday record.
The Standard & Poor’s 500 Index rose 10.37 points, or 0.67 pe rcent, to finish at 1,558.71. The Nasdaq Composite Index climbed 25.09 points, or 0.78 per cent, to close at 3,254.19. The Dow is now up 10.7 per cent for the year, while the S&P is up 9.3 per cent.