United States stocks edged up on Thursday, though trading was subdued a day after a Federal Reserve policy announcement that kept its stimulus plan in place.
While Thursday’s rise was modest, stocks were headed for strong gains in October.
Reuters reported that the Dow was up about three per cent as the month drew to a close, while the Standard and Poor’s 500 was up about five per cent and the Nasdaq rose 4.5 per cent.
Shares of Exxon Mobil Corporation, the world’s largest publicly traded oil company, helped support the Dow and S&P 500, rising 1.7 per cent to $90.50 after the company reported adjusted third-quarter earnings that beat expectations.
The US central bank on Wednesday said it would keep buying $85bn of bonds per month, noting weaker economic signals.
But it removed a phrase from a previous statement expressing worries about credit conditions after a spike in bond yields, which investors interpreted as a sign the Fed could begin tapering earlier than expected.
“The Fed removed that language, and that leaves tapering on the table for December,” said Michael O’Rourke, chief market strategist at JonesTrading, referring to the Fed’s eventual trimming of asset purchases.
The Fed’s accommodative monetary policy in recent years has contributed to stocks’ rally, and investors worry about the timing of a pullback by the Fed.
The Dow Jones industrial average inched up 27.50 points, or 0.18 per cent, to 15,646.09. The S&P 500 added 4.84 points, or 0.27 per cent, to 1,768.15. The Nasdaq Composite rose 13.75 points or 0.41 per cent, to 3,998.89.
Expedia jumped almost 18 per cent to $58.61 and ranked as the S&P 500’s best per centage gainer on the S&P 500 a day after reporting third-quarter earnings that exceeded expectations.
Limiting gains, Visa Incorporated lost 2.9 per cent to $197.97, making it the biggest drag on the Dow a day after the world’s largest credit and debit card company reported a 28 per cent drop in quarterly profit.
Thursday’s economic data was mixed. A gauge of business activity in the Midwest exceeded expectations in October, while weekly initial jobless claims dipped in the latest week.
The Labor Department’s October employment report will be an important source of clues about the economy and future Fed action.
