The Ben S. Bernanke-led Federal Reserve said the U.S. recovery was weak enough and that the threats from global financial instability were great enough that it would step in to support the economy.
Investors approved of the widely expected move and pushed the Dow Jones Industrial Average up 0.7 percent, or 96.72 points, to 13,430.07 by 1:00 in New York. The S&P Retail Index rose 0.6 percent, or 3.74 points to 659.74.
The Fed said it would buy an additional $40 billion in mortgage-backed debt each month and to keep its bench mark interest rate at historically low levels until mid 2015. The central bank previously guided that it would keep interest rates low until at least late 2014.
The committee that sets monetary policy said it “is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions.Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.”
Fashion gainers included Fifth & Pacific Cos. Inc.,up 3.5 percent to $13.77; Perry Ellis International Inc., 2.9 percent to $22.98; Aéropostale, Inc. 2.9 percent to $14.62; V.F. Corp., 2.7 percent to $159.79, and Ann Inc., 2.6 percent to $38.96.
In Europe, stocks were mostly down as markets closed. Paris’ CAC 40 fell 1.2 percent to 3,502.09, as Milan’s FTSE MIB dipped 1.1 percent to 16,244.28 and Frankfurt’s DAX decreased 0.5 percent to 7,310.32.
London’s FTSE 100gained 0.7 percent to 5,819.92.
The region’s decliners included LVMH Moët Hennessy Louis Vuitton, down 1.6 percent to 123.30 euros; Marks and Spencer Group., 1.5 percent to 3.69 pounds; Hermès International, 1.5 percent to 214.20 euros; Burberry Group, 1.2 percent to 10.59pounds, and PPR, 1.1 percent to 123.30 euros. The pound traded at $1.60 against the dollar and the euro went $1.29.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)