By Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The Dow Jones Industrial Average
vaulted higher on Thursday trading, dragging the other major U.S.
benchmarks higher as well.
The Dow industrials staged a rally of more than 200 points,
after starting the session modestly higher. The rally marked the
blue-chip indexes eighth straight triple-digit gain in an October
that was frightful, at times.
Much of the Dow's gains can be credited to Visa Inc., Merck
& Co. But rosy economic data, pointing to
stronger-than-expected growth also factored.
Broader benchmarks also recorded modest gains, a day after the
Federal Reserve officially announced the conclusion of its
bond-purchasing initiative.
Confirming the Fed's optimistic view on the economy, the first
reading of third-quarter GDP came in better than expected,
expanding at a 3.5% annualized rate. Weekly jobless claims ticked
up. However, claims remain below the 300,000, pointing to an
improving labor market.
Dow Jones Industrial Average (DJI) rallied 221.11 points, or
1.3%, to 17,195.42. The top two winners on the index, Visa Inc and
Merck & Co, contributed 141 and 71 points, respectively, while
more than two-thirds of its components finished higher.
The S&P 500 index (SPX) closed 12.35 points, or 0.6%, to
1,994.65, after flirting with the 2,000 level at session highs.
The Nasdaq Composite (RIXF) added 16.91 points, or 0.4%, to
4,566.14. The Russell 2000 index gained 9.42 points, or 0.8%, to
1,155.79.
More volatility coming? Jim Reid, strategist at Deutsche Bank,
said the surprise was that the Fed chose to be so confident so soon
after the recent volatility. "Last night's statement would have
been near impossible to publish two weeks ago, so it is a bit of a
risk," he said in a note. Four reasons the market will rally for
the rest of 2014
"At a minimum, the Fed seem quite comfortable withdrawing
liquidity from the market, and with that, we continue to think that
bouts of volatility are more likely now than they were for most of
the two years that QE3 was in existence," said Reid. Economists
reactions to Fed statement: Signs of hawkishness
Earnings:
Visa Inc.(V) rose 10% after the company's earnings and revenue
beat forecasts. It's rival MasterCard Inc. (MA) also rallied 9.4%
after beating analysts' forecasts for third-quarter profits and
sales.
Avon Products Inc.(AVP) dropped 9% as weak foreign exchange
rates and higher supply chain costs weighed on results, which
topped Wall Street profit estimates.
Lakeland Industries Inc.(LAKE) soared 23%, following a big jump
in late trade on Wednesday, after the hazmat-suit maker reported
increased manufacturing capacity in response to the Ebola
crisis.
GoPro Inc.(GPRO)(GPRO) shares rose more than 6% in the extended
session Thursday after the mobile sports-camera maker's
third-quarter results topped Wall Street expectations.and
LinkedIn(LNKD) results topped forecasts, but outlook fell short of
expectations. Shares still rose 2% aftermarket. (Read more about
the day's notable stocks in Movers & Shakers column:
http://www.marketwatch.com/story/groupon-linkedin-expedia-earnings-in-focus-2014-10-30.)
Dollar up, gold slides: The dollar rose against the euro
(EURUSD) and the yen (USDJPY) -- briefly tapping its highest levels
since early October against the Japanese currency -- as investors
absorbed the Fed outcome. Gold(GCZ4) slid 2.2%, while crude-oil
prices(CLZ4) were off more than 1%.
European stocks pulled back, while Asian stocks saw mostly
moderate gains, outside of a 0.4% drop for Hong Kong's Hang Seng
Index .
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