Wall St surges as rates held steady

Fairfax Media

MARKET SURGE: Wall St jumped to a 17-month high after US interest rates were held steady.

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Wall St surged on the back of the US Federal Reserve’s decision to keep its benchmark interest rate near zero.

The Fed has held the benchmark federal funds rate near zero since December 2008 to bolster the economy and help it through the most severe financial crisis in generations.

The central bank pledged to continue to hold rates very low for "an extended period."

The US economy resumed growth in the second half of last year, and expanded at a robust 5.9 per cent annual clip in the final three months of 2009.

"The (Fed's policy) committee ... continues to anticipate that economic conditions, including low rates of resource utilisation, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period," the US central bank said in a statement.

Wall St rallied to a 17-month high in the wake of the Fed’s decision.

"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.

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.

- Reuters