Market Wrap: Dow Sets Record as Fed Says Rates Will Stay Low

John Moore/Getty Images By BERNARD CONDON

NEW YORK -- The stock market rose Wednesday after the Federal Reserve told investors to expect low interest rates for a while yet, pushing the Dow Jones industrial average to a record high.

After drifting along for most of the day, stocks march! ed higher after the U.S. central bank released a statement signaling little change in its interest rate policy. The gains were broad, with seven of the 10 industry groups of the Standard & Poor's 500 index ended up, led by materials stocks.

The Fed statement put to rest an anxious waiting game among investors that has left the S&P 500 moving between small gains and losses for a week. A rise in the short-term rates that the Fed controls has triggered stock drops in the past.

"The Fed is not going to take the punch bowl away," said Brad McMillan, chief investment officer for Commonwealth Financial. "They didn't want to spook the market."

In its statement, the central bank retained language in that it plans to keep short-term rates low "for a considerable time" after it ends its monthly bond purchases in November. For many investors, that meant the first hike won't come until the middle of next year.

The Dow (^DJI) rose 24.88 points, or 0.2 percent, to ! end at 17,156.85 - its 16th record high this year. The S&P 500! (^GPSC) edged up 2.59 points, or 0.1 percent, to 2,001.57, falling short of its own closing high of 2,007.71 from Sept. 5. The Nasdaq composite (^IXIC) was up 9.43 points, or 0.2 percent, to 4,562.19, still well below its dot-com era peak.

Shares of home builders jumped after builder confidence in the market for new homes rose to its highest level in nearly nine years. Miami-based Lennar (LEN) rose nearly 6 percent, the most in the S&P 500 index.

In economic news, U.S. consumer prices edged down in August, the first monthly drop since the spring of 2013, as gasoline, airline tickets and clothing prices all fell. It was the latest evidence that inflation remains under control, one of the factors the Fed uses in its decisions on rates.

DuPont (DD) surged $3.42 to $69.25, or 5.2 percent, the biggest gain in the Dow by far. Investors bought the stock on news that activist investor Nelson Peltz had sent a letter to the compan! y's board suggesting it split in two. His Trian Fund Management LP said it has been in private talks with DuPont for more than a year to boost shareholder value and improve its financial performance.

Gold, which was flat minutes before the Fed news on interest rates, ended down 80 cents, or 0.1 percent, to $1,235.90 an ounce. Silver rose 1.3 cents, or 0.1 percent, to $18.73 an ounce. Copper fell 2.3 cents, or 0.7 percent, to $3.14 a pound.

In government bond trading, the yield on the 10-year Treasury note edged up to 2.62 percent, from 2.59 percent late Tuesday. The yield has moved between a high of 3 percent and a low of 2.34 percent this year.

What to Watch Thursday:

• At 8:30 a.m. Eastern time, the Commerce Department releases housing starts for August, and the Labor Department releases weekly jobless claims.
• At 10 a.m., the Federal Reserve Bank of Philadelphia releases its September survey of manufacturing conditions in the Mid-Atlantic region, and Freddie Mac releases weekly mortgage rates.

These major companies are scheduled to release quarterly financial statements:

• For many employers, open enrollment season for some benefits happens in October. This usually sneaks up on some people, who scramble to decipher benefits and make elections last minute. Although you won't be able to see the options until the enrollment period opens, take time now to review your benefits. Are you taking advantage of any 401(k) matches? Are your fully funding your Flexible Spending Account? What about employer offered life and disability insurance? (A fun infographic from the Council for Disability Awareness shows your risks). Maximize your benefits and don't leave any money on the table.
  ​1. Make the right choices at open enrollment
• Back-to-school time can be expensive if you're not prepared. Money is spent on clothes, books, supplies and technology -- and that's before the doors to the classroom have even opened. Before hitting the stores, do these two things:

  • Conduct an online search for "coupon code" along with the name of any store you'll be shopping at. Typically you can find some great online deals.
  • Get a list from you class or teacher of specific type of notebook, calculator, etc. required. If you can't get child's "must haves" from ahead of time, buy just the bare minimums until school starts and the list is available.
  2. Spend wisely on back-to-school items
• It's hard to think about the holidays when we're just making it through summer, but now is the time to build up a financial cushion. Set yourself up with an automatic transfer to a separate savings account and participate in the Holiday Fund Money Challenge to build up a savings of $450. How much do you need for the gifts, travel, parties, entertaining, food and other holiday activities you anticipate? Planning will help to ease the stress that comes around the holidays.
  ​3. Plan for the end-of-year holidays
• In lieu of scrambling at the end of the year to make contributions to retirement accounts by Dec. 31, double-check your contributions now and determine if there's room in your cash flow to allow for an increase to possibly max out by year end.
  ​4. Maximize your retirement funding
• Summer is a typically a time of transitions. There are weddings, moves to new homes, possibly a new family addition and more. If summer is the time when these events take place, fall should be the time to take stock of how they're panning out. If you're recently married and haven't already, now is the time to have the money talk with your spouse and make decisions about spending plans, merging (or not merging) accounts, beneficiary updates and more. If you've moved, check out how the new location has affected your cost of living spending in terms of activities, gas costs, groceries and more. Ultimately with any transition, you need to review your spending plan and determine what areas (if any) need to be adjusted.
  5. Consider your transitions
• If you're lucky enough to live in one of the states that actually experiences seasons, fall is the time to prep for energy savings by caulking and weatherstripping doors and windows, turning your thermostat back for a fixed period each day and insulating your attic, basement or outside walls.
  6. Weatherproof your home
• More from DailyFinance:

Source : http://www.dailyfinance.com/2014/09/17/market-wrap-dow-sets-record-as-fed-says-rates-will-stay-low/