US stocks rose to a fresh 17-month high yesterday after the Federal Reserve held benchmark rates near zero and maintained its pledge to keep them low for an extended period. The central bank also pointed to increased momentum in the economy’s recovery, and that, coupled with strength in Intel, helped the Standard & Poor’s 500 index hit a fresh 17-month high.
“Although everything was expected here, it’s definitely a bullish sign that nothing negative came out of [the Fed] decision and the language as well,” said Cort Gwon, director of research and trading strategies at FBN Securities in New York.
Intel ranked among the Dow’s top performers, up 4 per cent at $22.01 on speculation that the world’s top chip maker is expected to release positive guidance for the current quarter. The Philadelphia semiconductor index gained 2.7 per cent.
General Electric gained 4.5 per cent to $18.07 after the Dow component’s chief financial officer said he expects the company’s earnings and dividend to rise in 2011.
The Dow Jones industrial average gained 43.83 points, or 0.41 per cent, to end at 10,685.98. The S&P 500 Index rose 8.95 points, or 0.78 per cent, to finish at 1,159.46. The Nasdaq Composite Index added 15.80 points, or 0.67 per cent, to close at 2,378.01.
The S&P 500 was able to puncture 1,150, a mark it had been unable to hold above in two previous attempts.