Ben Bernanke, chairman of the U.S. Federal Reserve, hosted his first-ever press conference after a monetary policy report on Wednesday - and the stock market loved what he had to say. While U.S. stocks held relatively steady after the policy report was released midday, they shot higher after Mr. Bernanke suggested at the press conference that interest rates were unlikely to head higher any time soon.
The Dow Jones industrial average closed at 12,690.96, up 95.59 points or 0.8 per cent. The broader S&P 500 closed at 1355.66, up 8.42 points or 0.6 per cent. In Canada, the S&P/TSX composite index closed at 13,892.57, down 16.53 points or 0.1 per cent - recovering from a triple-digit hole earlier in the day. The Nasdaq composite index closed at 2,869.88, the highest close for the index since Dec. 12, 2000.
The gains follow an otherwise uneventful Fed day, in which the central bank conformed to expectations - maintaining its key interest rate and maintaining that its bond purchase program (or quantitative easing) would wind down at the end of the quarter.
Commodity producers, which had been dragging on major indexes earlier in the day, played a big role in the afternoon's turnaround. For example, materials stocks had been the biggest laggards within the S&P/TSX composite index in midday trading, but ended the day with the index's biggest gains.
You can thank gold here: It bounced to a new record high of $1,517.10 (U.S.) an ounce, up $13.60. Barrick Gold Corp. rose 1.2 per cent and Kinross Gold Corp. rose 2.8 per cent. Energy stocks were mixed though, even after crude oil rose to $112.76 a barrel, up 55 cents. Suncor Energy Inc. fell 1 per cent but Chevron Corp. rose 0.2 per cent.
In other moves, Johnson & Johnson rose 1 per cent after it announced a definitive agreement to buy Synthes Inc. for $21.3-billion. General Electric Co. rose 2.7 per cent, Pfizer Inc. rose 2.2 per cent and Verizon Communications Inc. rose 1.7 per cent.
Among Canadian stocks, Rogers Communications Inc. rose 1.6 per cent, a day after the wireless and cable company reported better-than-expected financial results. Teck Resources Ltd. fell 1.5 per cent, Research In Motion Ltd. rose 0.3 per cent and Royal Bank of Canada fell 0.6 per cent.
