Not only did the central bank announce an open-ended plan to purchase $40 billion worth of mortgage-backed securities per month and extend its pledge to keep interest rates at their zero levels until at least mid-2015, the central bank also opted to maintain Operation Twist through the end of the year and said it believes a highly accommodative monetary policy "will remain appropriate for a considerable time after the economic recovery strengthens." Stocks stretched their initial gains even further as Fed Chairman Ben Bernanke defended the aggressive action in a press conference shortly after the decision was announced, saying "We want unemployment to come down in a sustained way." The Dow Jones Industrial Average closed up more than 206 points, or 1.55%, at 13,540. The day's intraday peak of 13,573 was the blue-chip index's highest level since December 2007. All 30 Dow components finished in the green. The biggest percentage gainers were Alcoa ( AA), American Express ( AXP) JPMorgan ( JPM) and Bank of America ( BAC). The S&P 500 jumped more than 23 points, or 1.63%, to settle at 1460, also a multi-year closing high. The Nasdaq surged nearly 42 points, or 1.33%, to close at 3156. The strongest sectors in the broad market were basic materials, energy and financials. Volumes totaled more than 4.57 billion on the New York Stock Exchange and 1.87 billion on the Nasdaq. Advancers outnumbered decliners by a nearly 4-to-1 ratio on the Big Board and 3-to-1 on the Nasdaq. The Fed estimated Thursday's moves will increase the amount of longer-term securities on its balance sheet by roughly $85 billion per month through the end of 2012. Operation Twist, which was announced in June, involves buying a comparable amount of longer-term securities as shorter-term bonds mature. The central bank said it expects to continue its monthly purchases of mortgage-backed securities until the labor market "improves substantially," adding that it could also "undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability." "In short, quite dovish and largely as we expected, with the exception that all of the new QE program will be in MBS rather than Treasuries," wrote Jim O'Sullivan, chief U.S. economist at High Frequency Economics, in the wake of the Fed's move. "As noted, though, they could well come back and add Treasuries after Operation Twist ends at year end." Eleven of the 12 members of the Fed's open market committee voted in favor of the policy action with Jeffery Lacker, president of the Federal Reserve Bank of Richmond, serving as the lone dissenter. The impact of the Fed's move was also felt in other asset classes. The benchmark 10-year Treasury rose 10/32, diluting the yield to 1.727%. The greenback fell 0.56%, according to the dollar index. October crude oil futures rose $1.30 to settle at $98.31 a barrel and December gold futures settled up $38.40 at $1772.10 an ounce.