US stocks rose as investors cheered after signals from the Federal Reserve that it would raise the interest rates eventually as it remains on a measured course to act.
According to Fox Business, the Dow Jones Industrial Average climbed 0.3% or 51 points to 17,208. The S&P 500 index gained 0.3% or 5 points to 2,007 while the Nasdaq composite index gained 0.4% or 17 points to 4,579.
In a statement, on Wednesday, the Fed said that its short-term rates of interests would remain almost zero for a certain period of time after the close of the monthly bond purchases. Janet Yellen, Fed chairwoman declined to shed light on how much time that would be.
The Dow has climbed 3.5% this year and rose 8.3% after Wednesday’s close. The Fed’s monetary policy has been credited for the past five years of stock market gains. The Fed is cautious in its approach to raise the rates, which some investors see as a move that is positive for the stocks.
Bloomberg reported that Paul Christopher, Wells Fargo Advisors LLC chief international investment strategist said, “Market overnight enjoyed a nice bounce thanks to the Fed maintaining its “considerable time” period language. The Fed’s not in a hurry to move and when it does, it will be a result of the time coming to normalize, not just to jack up rates.”
According to managing director of R.J. O’Brien & Associates, John Brady, the environment is risk on and it should last until the next job report, which will be examined by the Fed to check for economic recovery.
Schaeffer’s investment Research Inc senior equity analyst, Joe Bell said, “Jobless claims came in a little better than expected but nothing crazy to shift anything one way or another as the market’s still in Fed mode. A majority of people are thinking July 2015 may be the rate increase and the market’s responding positively to the idea that rates aren’t coming any sooner.”
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