Thursday, March 21, 2013

Wall Street extends gains as Federal Reserve leaves stimulus in place
NEW YORK: US stocks added to gains after the Federal Reserve said it was pressing forward with aggressive efforts to stimulate the economy.

In their statement, Fed officials said unemployment remains too high and noted "restrictive" fiscal policy.

"I wasn't expecting a lot from the Fed, in terms of the statement or actions. We've had a volatile week. The Fed was not going to want to rock the boat much," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

"It would be too destabilizing in a time we've just had a destabilizing European effect."

Cypriot leaders held crisis talks on Wednesday to avoid a financial meltdown after the country's parliament rejected a tax on bank deposits proposed over the weekend by European Union officials. Investors fear 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 was up 69.47 points, or 0.48 per cent, at 14,525.20. The Standard & Poor's 500 Index was up 11.06 points, or 0.71 per cent, at 1,559.40. The Nasdaq Composite Index was up 24.47 points, or 0.76 per cent, at 3,253.57.

After the Fed's statement, the Dow set an intraday record high at 14,546.82 - surpassing a previous record session high reached before the policy decision was released.

The housing sector's stocks ranked among the best performers after Lennar Corp reported a first-quarter profit well above analysts' expectations as lower interest rates and rising rents increased home sales.

Lennar's stock jumped 5.7 per cent to $43.78. The PHLX housing sector index shot up 3 per cent.