If Intel Corp.'s upbeat financial results and forecast gave the stock market a big boost on Wednesday, the U.S. Federal Reserve helped it along toward the close of trading with a slightly more upbeat forecast.
The Dow Jones industrial average closed at 8616.21, up 256.72 points or 3.1 per cent. The broader S&P 500 closed at 932.68, up 26.84 points or nearly 3 per cent.
The gains - the strongest in nearly two months - capped a three-day winning streak in which the S&P 500 has risen a total of 6.1 per cent, shaking off a lengthy period that challenged the stock market rebound that began in early March.
Intel Corp. rose 7.3 per cent after its second quarter results on Tuesday beat expectations. It helped lift other technology stocks as well. Microsoft Corp. rose 4.4 per cent and Cisco Systems Inc. rose 5.8 per cent.
Financials were also strong, after American Express Co. forecast that writeoffs associated with bad credit card debts will be lower in the second half of the year than originally forecast. Amex rose 11.3 per cent and Citigroup Inc. rose 8.6 per cent.
Upbeat views on the second quarter earnings season weren't the only drivers though. According to the Fed's minutes from the last monetary policy meeting, near the end of June, the central bank now sees the U.S. economy contracting between 1 per cent and 1.5 per cent this year, slightly better than its earlier forecast for a contraction of 1.3 per cent to 2 per cent.
Next year is also looking better: The Fed predicts the U.S. economy will expand 2.1 per cent to 3.3 per cent, up from an earlier prediction for growth between 2 per cent and 3 per cent.
In Canada, the S&P/TSX composite index closed at 10,215.46, up 229.31 points or 2.3 per cent - firing on all three cylinders that really matter to the index.
Financials were among the biggest movers, continuing their recent winning streak. Manulife Financial Corp. rose 5.4 per cent and Bank of Nova Scotia rose 2.8 per cent.
Commodity producers were also strong, after the price of crude oil surged to $61.54 (U.S.) a barrel, up $2.02, and gold rose to $939.40 an ounce, up $16.60. Among energy producers, Suncor Energy Inc. rose 3.7 per cent and Canadian Oil Sands Trust rose 5.7 per cent. Goldcorp Inc. rose 4.1 per cent.
The Canadian dollar surged along with the commodity producers, rising to 89.7 cents against the U.S. dollar, up 1.7 cents - its biggest one-day gain since the end of May.