Fed Scales Back Stimulus Campaign.

[Jesus Malverde]

2. U.S. stocks soar as Fed scales back stimulus

U.S. stocks rallied Wednesday as markets interpreted the Federal Reserve’s decision to begin the tapering of bond purchases in January as confidence in the underlying strength of the economy.

Dow Jones Industrial Average DJIA +1.85% jumped 228 points, or 1.5%, to 16,105.40. The S&P 500 index SPX +1.67% rallied 24 points, or 1.3% to 1,805.84, within a hair’s breadth of its all-time high. Nasdaq Composite COMP +1.15% was up 32 points or 0.8% to 4,055.70.

All ten main sectors on the S&P 500 were higher with financials and health care stocks leading the gains. Nasdaq’s rally was somewhat hampered by Apple Inc., AAPL -0.15% which fell 1.1%.

The Federal Open Market Committee stressed its commitment to low short-term interest rates and added new language that it plans to maintain the target Fed funds rates “well past the time that the unemployment rate declines below 6.5%.”

Earlier, housing starts data showed that Americans built more new homes than expected in November, shrugging off rising mortgage rates. The pace at which new homes were built soared to a seasonally adjusted annual rate of 1.09 million, the highest rate since February 2008, with surges for single-family homes and apartments, the government reported Wednesday.

http://www.marketwatch.com/story/us-stocks-up-on-strong-housing-data-2013-12-18?link=MW_latest_news