U.S. Markets Gain On Fed Comments, Set New Yearly High

New York, NY, United States (AHN) – U.S. markets rallied to new highs after the Federal Reserve said it will leave its benchmark interest rate at historic lows, sending all three major indices higher Tuesday.

In late afternoon trading, while markets were sitting flat, the Federal Reserve said it will keep the federal funds rate at a target of 0 to 0.25 percent. The Fed also said it sees continued firming the labor markets and moderate growth in consumer spending.

The Dow Jones Industrial average added 44 points or 0.4 percent. Dow advancers outpaced decliners 24 to 6 with Intel providing the biggest boost. Shares of the chipmaker jumped nearly 4 percent after unveiling a new microprocessor that claims to boost server performance by 60 percent.

The S&P 500 rose 9 points to 1159, marking a new high for the year. The index closed at its highest level since October 2008.

The Nasdaq Composite added 16 points or 0.7 percent as big-cap tech rebounded. Shares of NVIDIA Corp. and KLA-Tencor added more than 3 percent as the chip and memory stocks were strong. The Philadelphia Semiconductor index was strong on Tuesday, adding 2.7 percent.

Crude oil rallied Tuesday, adding 2.4 percent to settle at $81.70 a barrel on the New York Mercantile Exchange.

In economic news, the Commerce Department said new housing starts fell 5.9 percent in February to an annualized rate of 575,000. The result topped economists’ expectations as a decline to 570,000 was predicted due to weather conditions throughout the month.

The Commerce Department also reported a drop in building permits, down 1.6 percent in February to an annual rate of 612,000. The drop from January’s rate of 622,000 was also better than expected as economist predicted a pace of 601,000.

Wednesday’s market will see the release of the Producer Price Index (PPI) for February followed by a report on crude oil inventories for the week ended March 13.

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