US stocks rise as Fed begins policy talks
US stocks maintained their upward momentum, with the Standard & Poor’s 500 Index extending its record high. The benchmark index was supported after weak economic data reassured market participants the Federal Reserve won’t reign in record stimulus at this time. The Federal Open Market Committee is coalescing in Washington for a two-day meeting to discuss monetary policy.
Declining consumer confidence fueled expectations the FOMC meetings will be a non-event, as market participants grow more confident the Fed will continue to ease at its current pace. Consumer confidence fell to a six-month low in October, according to the closely followed Consumer Price Index. Fewer Americans expect more jobs to be available in the months ahead, and even fewer expect business conditions to improve over the next half-year, according to The Conference Board.
Combined with weaker than projected job growth over the past three months and a prolonged government shutdown that cost the economy $24 billion, the chances the Federal Reserve tapers asset purchases are slim.
Stocks were led higher by Pfizer Inc, after the world’s largest drug producer beat third quarter profit forecasts. Pfizer (NYSE:PFE) shares jumped 1.66 percent. Despite flat quarterly earnings, AT&T (NYSE:T) jumped 1.97 percent, as the telecommunications giant continues to forge partnerships with the automotive industry, which is experiencing a wireless revolution.
The S&P 500 advanced for the 12th time in the past 14 sessions, gaining more than half a percent to 1,771.95. The Dow Jones Industrial Average rallied 111 points to 15,680.30 after all but six of its 30 members reported gains. The NASDAQ Composite remained in positive territory after Apple’s (NASDAQ:AAPL) annualized profits declined for the third consecutive quarter. The maker of the iPhone and iPad reported better than forecasted quarterly revenue and profits Monday, but has some market participants concerned about future profitability. The NASDAQ gained 12 points to 3,952.34.
US stocks will remain elevated so long as Fed policy doesn’t threaten the current pace of monetary easing. The Fed will announce its latest policy decision Wednesday afternoon.
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