Summary Box: Dow soars 429 points on Fed statement

AP News
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Posted: Aug 09, 2011 6:19 PM
Summary Box: Dow soars 429 points on Fed statement

THE STATEMENT: The Federal Reserve pledged to keep its key interest rate at its record low of nearly zero through the middle of 2013. The central bank also said that it has discussed "the range of policy tools" it can use to spur the economy.

THE INTERPRETATION: Bob Doll, chief equity strategist at BlackRock said the Fed's decision to hold interest rates at a very low rate for two years is "unprecedented" and called it a kind of backdoor quantitative easing. In June, the central bank finished its second round of bond buying, also known as quantitative easing, in hopes of boosting the economy.

THE REACTION: At first, stocks fell after the Fed's statement. But the market turned in the last hour of trading. The Dow Jones industrial average rose 429.92 points, or 4 percent, to 11,239.77. The S&P 500 rose 53.07, or 4.7 percent, to 1,172.53. The Nasdaq composite index rose 124.83, or 5.3 percent, to 2,482.52.