The Fed also lowered its outlook for economic growth this year to no stronger than 2 percent. That's down from its forecast of 2.4 percent in June.
In Treasury trading, the yield on the benchmark 10-year note fell slightly to 1.73 percent from 1.79 percent late Wednesday. It had spiked to 1.84 percent as investors sold bonds after the Fed announcement.
The dollar fell slightly against major currencies. It tumbled almost a penny against the euro, which rose to a hair under $1.30.
The price of gold climbed to its highest level since February â¿¿ $1,772 an ounce, a gain of $38, or 2 percent. When the Fed buys bonds, gold often rises, both because investors fear inflation and because a weaker dollar makes gold more expensive.The trading day didn't begin well. European markets were falling and U.S. futures slid, suggesting stocks might fall when U.S. markets opened. In addition to worries about what the Fed might do, investors were rattled by turmoil in the Middle East. Protesters stormed the U.S. Embassy compound in Yemen's capital earlier in the day, and there was violence around the U.S. mission in Cairo. The U.S. ambassador to Libya was killed Tuesday. Stocks rose after the open but barely. Then the Fed released a statement about its moves shortly after 12:30 p.m., and prices began to climb steadily. Some Fed watchers homed in on a pledge to keep stimulating the economy for a "considerable" time "after" it appears to have strengthened. That is stronger language than the central bank had used before. Then Bernanke started speaking at the press conference at around 2:15, and stocks shot up. A few minutes into the conference, the Dow was up nearly 240 points. "We are looking for ongoing, sustained improvement in the labor market," Bernanke told reporters. "There's not a specific number in mind. But what we've seen in the last six months isn't it."
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts