NEW YORK (Reuters) - Stocks rose to seven-week highs on Wednesday after the Federal Reserve announced a new stimulus plan, its latest attempt to boost the country's struggling economy.
The new plan will replace a more modest program due to expire with a fresh round of Treasury purchases that will increase its balance sheet, as was widely expected.
The S&P 500 ticked up as high as 1438.59, its highest intraday level since October 22, with all 10 industry sectors in positive territory. Financials led the advance, with the S&P financial sector index <.gspf> up 1.1 percent.
"It is good for stocks and risk more generally. And they came out with an economic data point as a guideline. That's very important, because it helps the market anticipate an exit strategy," said Quincy Krosby, market strategist at Prudential Financial, in Newark, New Jersey.
The central bank conmitted to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September. It also said it will keep its near-zero interest-rate program in place until the U.S. unemployment rate falls to 6.5 percent from its current 7.7 percent.
Negotiations over plans to avoid the "fiscal cliff" intensified in Washington, but U.S. House of Representatives Speaker John Boehner said on Wednesday "serious differences" remain with President Barack Obama in their talks. If no agreement is reached, steep tax hikes and budget cuts will fall into place next year.
The S&P 500 was up for a sixth straight day, its longest winning streak since August, although gains have been less than 0.5 percent per day, on average, in part due to uncertainty over the cliff negotiations.
The Dow Jones industrial average <.dji> climbed 65.18 points, or 0.49 percent, to 13,313.62. The Standard & Poor's 500 Index <.spx> rose 8.83 points, or 0.62 percent, at 1,436.67. The Nasdaq Composite Index <.ixic> gained 7.70 points, or 0.25 percent, at 3,030.00.
Shares of Aetna , the third-largest U.S. health insurer, jumped 4.5 percent to $46.52 a day after the company gave a higher forecast for profit and revenue growth in 2013.
But Wal-Mart Stores Inc
Shares of Berkshire Hathaway
(Reporting by Gabriel Debenedetti; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)
Stocks extend gains after Fed unveils stimulus plan
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Stocks extend gains after Fed unveils stimulus plan
