The Federal Reserve’s increasingly positive view of the economy lifted the major indices more than 1 percent Wednesday, but retail stocks had to settle for more modest increases.
The S&P Retail Index added 3.23 points, or 0.9 percent, to end the day at 366.94, putting an end to a two-day losing streak. But the Dow Jones Industrial Average rose 120.16 points, or 1.3 percent, to 9,361.61, and the S&P 500 reclaimed the 1,000 mark given up on Tuesday with a 11.46 point, or 1.2 percent, leap to 1,005.81.
The Nasdaq Composite logged the biggest increase of the day, vaulting nearly 29 points, or 1.5 percent, to 1,998.72 after pulling off from the day’s high of 2,015.26.
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Stocks began the day higher in anticipation of an upbeat message from the Fed, rose after its transmission but then pulled back in the final hour of trading.
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The Fed said that, since its June meeting, the economy has been “leveling out” with improved conditions in financial markets and stabilization in housing despite “ongoing job losses, sluggish income growth, lower housing wealth and tight credit.”
The statement read, in part, “Businesses are still cutting back on fixed investment and staffing but are making progress in bringing inventory stocks into better alignment with sales.”
Keeping the target rate for federal funds at between zero and 0.25 percent, the Fed also said it would “gradually slow” the pace of its buying of Treasury securities.
The day began with a 3 percent drop in Hong Kong’s Hang Seng index and a 1.4 percent decline in Japan’s Nikkei 225. However, European markets fared better, with the CAC 40 in France rising 1.5 percent to 3,507.24 and London’s FTSE 100 up 1 percent to 4,716.76.
Among issues tracked by WWD, the biggest gainer of the day worldwide was Pacific Sunwear of California Inc., with an 11 percent rise to $4.05.