Thursday, Sep 13, 2012

--U.S. stocks gain after Federal Reserve easing announcement

--Gains echo through other global markets

--Stocks continue recent rally to multiyear highs

NEW YORK--New efforts by the Federal Reserve to juice the U.S. economy sent U.S. stocks sharply higher Thursday and echoed through other global markets

The Dow Jones Industrial average gained 91 points, or 0.7%, to 13425. The Standard & Poor's 500-stock index gained 11 points, or 0.8%, to 1448, and the Nasdaq Composite gained 29 points, nearly 1%, to 3143.

The Federal Reserve announced a major round of bond-buying for mortgage-backed securities, another unconventional effort to bolster the U.S. economy. Fed Chairman Ben Bernanke will have an afternoon news conference to discuss the central bank's decision.

U.S. stocks continued a recent rally to their highest levels since before the financial crisis on the new round of bond-buying. Last week's announcement of a European Central Bank plan for additional stimulus for that region's struggling economies set the stage for Thursday's follow-up in the U.S.

The move sent stocks to session highs, pushed the price of U.S. government debt lower and whipsawed commodity markets.

Treasury prices fell, with the yield on the benchmark 10-year note rising to 1.818%. Gold futures jumped 1.1% to $1,748,90, erasing losses before the release. Crude oil futures rose 0.4% to $97.36. The dollar edged lower versus the euro and fell against the yen.

"It looks like it's not as strong as some would have liked, but stronger than many had feared," said Andrew Brenner, head of global fixed income at National Alliance. "Treasurys are weaker because people were anticipating the Fed was going to go in and buy Treasurys. The Fed moved away from Treasurys and is moving toward mortgages."

In other economic news, reports on initial claims for jobless benefits were 382,000 in the latest week, higher than expected. The producer price index for August, a measure of wholesale inflation, climbed 1.7% from July, more than the expected 1%. Core PPI--excluding food and energy--rose 0.2%, more than the expected 0.1%.

In the corporate arena, shares of Apple gained 1.6%. On Wednesday, the stock closed up 1.4% after the unveiling of its new iPhone 5.

European markets pulled back from a yearly high, with the Stoxx Europe 600 down 0.2%. The Organization of Economic Cooperation and Development's leading economic indicator suggested most major economies will continue to slow in the coming months.

Asian markets were mixed, with Japan's Nikkei Stock Average gaining 0.4% and China's Shanghai Composite falling 0.8%.

Write to Alexandra Scaggs at alexandra.scaggs@dowjones.com

(END) Dow Jones Newswires

September 13, 2012 13:20 ET (17:20 GMT)