Energy companies followed oil prices higher.
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The Australian dollar edged up to an nearly two-week high of $0.7641 after new Reserve Bank of Australia Governor Philip Lowe said interest rate cuts and a weaker currency were helping the economy, but that it was “not particularly useful” to keep cutting rates in the hope that this would eventually lift growth.
The Dow Jones industrial average ended up 98.76 points, or 0.54 percent, at 18,392.46, the S&P 500 gained 14.06 points, or 0.65 percent, to 2,177.18, while the Nasdaq Composite added 44.34 points, or 0.84 percent, to 5,339.52, a record closing high. Eastern. The Standard & Poor’s 500 index rose 11 points, or 0.5 percent, to 2,174 and the Nasdaq composite rose 34 points, or 0.7 percent, to 5,329.
The S&P 500 had its best two-day performance in more than two months, while the dollar fell to its lowest in 10 days against a basket of major currencies. After taking a day to digest the Fed’s statement, investors came to the conclusion that it is not only the Fed’s decision to hold rates steady that is driving stocks higher, but also the expectations of economic conditions over the next couple of years. The precious metal is heading for the biggest weekly advance since July after United States central bankers opted once again to leave interest rates unchanged while reining in their outlook for future increases.
The Fed also said in the statement that near-term risks to the U.S. economic outlook “appear roughly balanced”, a further sign that the central bank could raise rates by the end of this year.
Traders believe the Fed has become hopelessly divided, divided between a small group of hawkish dissenters and the majority that do not appear to be in a rush to raise rates (three Committee participants did not believe rates will be raised at all this year), and who do not appear overly anxious that the Fed may be losing credibility by failing to act.
BONDS AND CURRENCIES: U.S. government bond prices rose.
Drug maker Mylan rose 1.6 per cent after chief executive Heather Bresch defended the company against tough questioning in a congressional hearing on price increases of EpiPens, which are used to counter allergic reactions.
US crude rose 2.29 percent after data showed a bigger-than-expected draw in inventories.
Murphy Oil jumped $1.08, or 4 percent, to $27.52, Transocean rose 33 cents, or 3.5 percent, to $9.46.
FedEx rose 6.5 percent to $173.30 after the package delivery company’s quarterly profit rose more than expected.
Other commodities also rose, which helped out materials stocks. It fell by 0.7 percent for the week, its worst weekly performance since the week of August 18. Copper miner Freeport-McMoRan rose 4 percent.
Gold futures for December delivery advanced 1 percent to settle at $1,344.70 an ounce at 1:50 p.m. on the Comex in NY, after reaching $1,347.80, the highest since September 8.
Silver fell 0.6 percent to $19.72.
About 6.3 billion shares changed hands on US exchanges, below the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.
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Gold rose to the highest in two weeks after policymakers kept US interest rates unchanged for a sixth straight meeting and cut their outlook for rate increases next year. As of Thursday, the rebound has boosted gold up to touch key resistance at a descending trend line that extends back from July’s $1375-area highs.
