DJI- NEW YORK, Sept 13 (Reuters) - U.S. stocks surged to multi-year highs on Thursday after the Federal Reserve announced an aggressive plan to stimulate the economy, encouraging investors to dive back into the market.
The Dow and the S&P 500 both closed at their highest levels since December 2007, while the Nasdaq ended at the highest since November 2000.
Major market names were big winners, with Apple Inc AAPL.O, the most valuable U.S. company, ending at an all-time closing high and No. 2 Exxon Mobil XOM.N, closing at a four-year high. Nearly 600 shares on the New York Stock Exchange and Nasdaq touched 52-week highs on the day.
"There has been a lot of money that's been sitting on the sidelines, and the Fed action is what spurred people to get in," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York. "The spike in volume is certainly heartening."
Total volume was 8.14 billion shares, the busiest day of trading since June 22 and above last year's daily average of 7.84 billion.
In a significant shift in monetary policy, the Fed said it would buy $40 billion of agency mortgage debt per month and pledged to maintain it until the U.S. unemployment rate, currently at 8.1 percent, significantly improves. (Full Story)
"The employment situation ... remains a grave concern," Fed Chairman Ben Bernanke told reporters. "While the economy appears to be on a path of moderate recovery, it isn't growing fast enough to make significant progress reducing the unemployment rate."
The Dow Jones industrial average .DJI ended up 206.51 points, or 1.55 percent, to 13,539.86. The Standard & Poor's 500 Index .SPX closed up 23.43 points, or 1.63 percent, to 1,459.99. The Nasdaq Composite Index .IXIC rose 41.51 points, or 1.33 percent, to 3,155.83.
Financial, materials and energy shares led the gains given their sensitivity to the economic outlook. Wells Fargo WFC.N jumped to a new 52-week high while the PHLX Housing Index .HGX rose 1.91 percent.
The buying of mortgage bonds is "very positive for the housing market, and for consumers in general and should really go a long way to helping stabilize the economy," Ghriskey said.
Many investors had expected the Fed to act, as reflected in the latest run-up in equity prices, but analysts said there were still some who believed that the Fed would wait until after the November presidential election.
"A lot of those doubters had to be brought up to speed here, so to speak," said Ron Rowland, president of Capital Cities Asset Management in Austin, Texas.
In an additional move that reflects just how concerned Fed officials are about the economy, officials said they were not likely to raise interest rates from near zero until at least mid-2015. Previously, it had set such guidance at late 2014.
Apple's stock AAPL.O rose 1.97 percent to $682.98 after analysts said sales of the new iPhone 5 could double those of the previous model in its first week on the market.
Exxon Mobil XOM.N gained 1.88 percent to $91.23.
The S&P financial sector index .GSPF added 2.58 percent. The S&P materials sector index .GSPM advanced 2.56 percent.
Some analysts said with the S&P 500 index up 16 percent since the beginning of the year and stocks' recent advance on hopes for help from central banks, the gains may be an opportunity for investors to pare positions.
Economic data showed the number of Americans filing new claims for jobless benefits rose more than expected last week. Wholesale prices rose 1.7 percent in August, the largest gain since June 2009, although core inflation was stable.
On the New York Stock Exchange, about four stocks rose for every one that fell. On the Nasdaq, five stocks rose for every two that fell.
NYMEX- NEW YORK, Sept 13 (Reuters) - U.S. crude futures pushed higher and hit a four-month peak on Thursday as the Federal Reserve's launch of another stimulus program weakened the dollar and boosted oil and equities prices.
CBOT SOYBEAN- Sept 13 (Reuters) - Soybean futures on the Chicago Board of Trade ended modestly higher on Thursday, rebounding from early weakness after the U.S. Federal Reserve announced a fresh phase of monetary stimulus, traders said.
• The Fed's move is expected to boost investment in riskier assets including commodities, as have previous stimulus initiatives.
• Profit-taking after Wednesday's rally pared gains.
• Soybean futures volume was estimated by CME Group at 182,564 contracts as of 4 p.m. CST (2100 GMT).
• Worries about tight soybean supplies lent support a day after the U.S. Department of Agriculture pared its forecast of U.S. 2012 soybean production.
• Weekly export sales fell short of trade expectations but year-to-date export sales of U.S. soybeans for shipment in the 2012/13 marketing year begun Sept. 1 have reached 20.385 million tonnes, 71 percent of the current USDA full-season forecast for 28.71 tonnes in exports.
• USDA data showed net combined-marketing-year soybean export sales for the latest week at 570,000 tonnes, below trade forecasts for 600,000 to 750,000 tonnes. More than 2 million tonnes in sales were carried over from the 2011/12 marketing year, which ended Aug. 31, into 2012/13.
• Light support from forecasts for frost in the Upper Midwest next weekend, although some analysts said the crop's maturity would limit any damage. Light, scattered rains on Thursday and Friday will cause some Midwest harvest slowdowns.
• Crushers in China bought 399,741 tonnes of soybeans from the government's bi-weekly auction at an average price of 4,552 yuan ($720) per tonne, the Chinese government said.
• Top global soy buyer China will face tight supplies of feed meal from the fourth quarter of this year through early 2013 due to U.S. crop losses from drought, a senior industry official said.
FCPO- KUALA LUMPUR, Sept 13 (Reuters) - Malaysian palm oil futures dropped on Thursday on expectations of output rising this month that could lead to a stock build-up, although losses were limited by expectations of strong Asian demand and tight supply of competing soyoil.
REGIONAL EQUITY- Sept 13 (Reuters) - Most Southeast Asian stock markets edged up ahead of the U.S. Federal Reserve's decision later in the day, with Malaysia and Indonesia seeing strong foreign inflows as investors remained cautiously optimistic on possible further stimulus action to bolster the world's largest economy.
Palm oil prices have lost 8 percent so far this year thanks to the euro zone debt crisis stirring concerns of weaker global growth and commodity demand. In recent weeks, palm oil has dropped below 3,000 ringgit on rising stocks.
"The market is bearish. There's no doubt about it because fundamentally stocks are very high and there is no sign that production is slowing down," said a trader with a local commodities brokerage.
"Everybody knows at the back of their mind that production is climbing higher towards the peak, maybe in October," the trader added.
The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange ended down 0.6 percent to 2,912 ringgit ($944.8) per tonne.
Total traded volume stood at 32,384 lots of 25 tonnes each, higher than the usual 24,000 lots.
Technicals showed palm oil will end its current rebound around a resistance at 2,960 ringgit per tonne and drop back to its Sept. 11 low of 2,874 ringgit, said Reuters market analyst Wang Tao.
Traders have said the palm oil's widening discount to soyoil limit prices from falling as consumers shift their purchases to the tropical oil produced in Indonesia and Malaysia.
"Palm oil is now so much discounted against soy bean oil with the cap reaching $300. The market is just waiting for the time to bounce back and climb higher. Eventually, demand will start setting in," said the trader.
For now, palm oil's discount to soyoil could widen further after the U.S. Department of Agriculture cut its estimate of the soybean crop in the world's top grain-exporting nation.
The USDA pegged the soybean harvest at 2.634 billion bushels, down from last month's 2.692 billion and below analysts' average estimate of 2.657 billion. Ending stocks next summer were projected to be the lowest in nine years at 115 million, unchanged from August' s estimate.
Oil futures rose above $116 a barrel on Thursday as investors awaited a U.S. Federal Reserve announcement, expected to include more stimulus action to bolster the economy of the world's biggest oil buyer.
In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 inched up 0.2 percent. The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange rose 0.7 percent.
Malaysia .KLSE ended 0.9 percent higher on strong volume with a net foreign inflow of $43.96 million. Indonesia saw $50.19 million net offshore buying, despite the broader Jakarta index .JKSE edging down 0.1 percent.
The Philippines .PSI, the region's second best performer after Thailand, gained 0.6 percent to a one-month high, while Vietnam .VNI ended 0.8 percent firmer. Singapore's benchmark Straits Times Index .FTSTI ended steady at two-week high.
Bucking the trend, Thailand .SETI fell 0.2 percent from a 16-year high.
