Dow And S&P 500 Reach New Record Closing Highs

(RTTNews) - Stocks moved sharply higher during trading on Wednesday, benefiting from a positive reaction to the Federal Reserve's decision to scale back its stimulus program. The strong gains on the day lifted the Dow and the S&P 500 to new record closing highs.

The rally on Wall Street came on the heels of news that the Federal Reserve is reducing its asset purchase program by $10 billion per month beginning in January.

Traders seemed to react positively to the removal of the recent uncertainty regarding the timing of tapering as well as the Fed's optimistic remarks regarding the economy.

After seeing early strength following upbeat housing starts data, housing stocks accelerated to the upside after the Fed announcement. The Philadelphia Housing Sector Index surged up by 3.7 percent, reaching its best closing level in over six months.

Considerable strength also emerged among banking stocks, as reflected by the 2.5 percent gain posted by the Dow Jones Banks Index. Bank of America (BAC) and Northern Trust (NTRS) turned in two of the sector's best performances.

Most of the other major sectors also moved to the upside, with significant strength visible among biotechnology, healthcare, brokerage, and retail stocks.

However, gold stocks bucked the uptrend, as the price of the precious metal came under pressure in electronic trading following the Fed announcement.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow soared 292.71 points or 1.8 percent to 16,167.97, the Nasdaq jumped 46.38 points or 1.2 percent to 4,070.06 and the S&P 500 surged up 29.65 points or 1.7 percent to 1,810.65.