Nasdaq hits record as Fed keeps rates low

US stocks surged Wednesday with the Nasdaq hitting a fresh record after the Federal Reserve kept interest rates low.

The Nasdaq Composite index jumped 1.0 per cent to 5,295.18, up about 12 points from the previous record on September 7.

The Dow Jones Industrial Average rose 0.9 percent to 18,293.70, while the broad-based S&P 500 gained 1.1 per cent to 2,163.12.

The Fed kept in place its ultralow federal funds rate of 0.25-0.50 per cent as it trimmed its forecast for US economic growth in 2016.

However, Fed Chair Janet Yellen said the economy continues to broadly show progress. Fed officials indicated they foresee one rate hike before the end of the year.

Confidence in economy

“"What’s nice here is that the Fed didn't hike interest rates, yet they still have confidence in the economy,” said Gregori Volokhine of Meeschaert Capital Markets. “That’s what is pushing the market higher.”

Nasdaq-traded companies with especially impressive gains included Amazon, up 1.2 per cent, eBay, up 2.0 per cent and Yahoo, up 3.2 per cent. Apple was flat.

Microsoft, which is listed on the Dow as well as the Nasdaq, gained 1.7 per cent as it increased its dividend and announced a new share repurchase program of up to $40 billion.

Adobe Systems shot up 7.1 per cent after reporting third-quarter net income of $270.8 million based in part on gains in subscriptions for its cloud-based programs.

Petroleum-linked shares were also strong, with Dow member Chevron climbing 2.0 per cent and Halliburton 3.5 per cent after oil prices rose.

Dow member Boeing rose 2.2 per cent after US officials granted it a license to complete a sale of planes to Iran Air, moving it closer to the first such deal since the 1979 revolution. Rival Airbus also received such a license.

Package shipper FedEx jumped 6.9 per cent after reporting a 3.3 per cent rise in fiscal first-quarter earnings to $715 million in results that bested expectations.