Wall St hits 17-month high

Market close

US stocks rose to a fresh 17-month high on Tuesday 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 S&P 500 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 US$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 US$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 Standard & Poor's 500 Index rose 8.95 points, or 0.78 per cent, to finish at 1159.46. The Nasdaq Composite Index added 15.80 points, or 0.67 per cent, to close at 2378.01.

The S&P 500 was able to puncture 1150, a mark it had been unable to hold above in two previous attempts, and a level strategists cited as a significant obstacle for more gains.

"Throughout the day and the past week, we've been breaking out of this S&P 500 trading range of 1,050 to 1,1150 _ hopefully, we are breaking into a new trading range.'' Gwon added.

Earlier in the session, stocks moved higher after Standard & Poor's ended its review for a downgrade of Greece, saying the government's recent deficit-reduction measures are supportive of the ratings. Concerns about Greek debt have been a drag on equities in recent weeks.

Data on Tuesday showed US housing starts fell last month as winter storms in parts of the country disrupted home building, while a drop in import prices pointed to muted inflation pressures.

About 7.89 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, the third slowest day of 2010, and below last year's estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 11 to 4, while on the Nasdaq, nearly 17 stocks rose for every 10 that fell.

- Reuters