Closing Update: Stocks End at All-Time Highs After Fed Begins to Pull Back on Asset Purchases

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Stocks rallied today after the Federal Reserve decided to cut back on its $85-billion monthly bond buying program by $10 billion starting in January but said it will keep interest rates at historic lows until the labor market significantly improves.

Traders initially pushed the Dow Jones Industrial Average and the S&P 500 lower in the first moments after the 2 p.m. ET announcement, only to quickly reverse course to lift the market gauges to large gains as the central bank said it likely will maintain its low interest rate policies in place for several more years.

In its statement following the conclusion of the Federal Open Markets Committee meeting, the central bank acknowledged economic condition continue to improve at a moderate pace and would reduce its asset-buying program by $10 billion a month to $75 billion per month - cutting $5 billion from its $45 million in Treasury securities purchases and $5 billion from its $40 billion per month for agency mortgage-backed securities.


But the Fed also said it would keep interest rates near zero "until the outlook for the labor market has improved substantially in a context of price stability."

Early gains for stocks today also were supported by homebuilders reporting another banner month, with housing starts climbing to a 1.091 million annualized pace during November, reaching a five-year high. Building permits activity was equally robust, increasing to an annualized 1.007 million.

Commodities were mostly higher today, with crude oil for February delivery setting 61 cents higher at $98.08 per barrel. January natural gas fell 2 cents to $4.26 per 1 million BTU. February good rose $4.60 to $1,234.60 per ounce while March silver added 22 cents to finish at $20.06 per ounce. March was unchanged at at $3.32 per pound.

Here's where the markets stood at end-of-day:

Dow Jones Industrial Average up 292 (+1.8%) at 16,167

S&P 500 up 29 (+1.7%) at 1,810

Nasdaq Composite Index up 46 (+1.2%) at 4,070

GLOBAL SENTIMENT

Hang Seng Index up 0.32%

Shanghai China Composite Index down 0.13%

FTSE 100 Index up 0.09%

UPSIDE MOVERS

(+) SYNM, Accepts a stock swap worth up to $49 million from Renewable Energy Group Inc. ( REGI ) for substantially all of its assets, including a 75-million gallon bio-diesel facility in Geismar, La., in exchange for 3.796 mln REGI shares.

(+) VCI, Agrees to be acquired and taken private by Harland Clarke Holdings for $1.84 billion.

(+) DEPO, Acquires U.S. rights to Nautilus Neurosciences' ( NLS ) Cambia non-steroidal anti-inflammatory drug for $48.7 million..

DOWNSIDE MOVERS

(-) WPCS, Steadily lost ground today after announcing a deal to acquire BTX Trader, which is developing a proprietary trading platform for the bitcoin industry. To fund the deal, WPCS will issued preferred stock and warrants, generating 2.35 mln.

(-) JBL, Issues guidance for its quarter ending in February trailing analyst expectations by a wide margin due to lackluster demand for Apple's ( AAPL ) iPhone 5c, for which the company makes casings.

(-) OPXA, Prices offering of 4.12 mln shares at $1.70 apiece, generating about $7 mln in gross proceeds to support continued clinical studies of the company's Tcelna drug candidate in patients with secondary progressive multiple sclerosis.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.



This article appears in: Investing , Commodities

Referenced Stocks: AAPL , NLS , REGI

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