US stocks surge as Fed holds interest rates

Stocks on Wall Street surged to fresh three-year highs after US Federal Reserve chairman Ben Bernake confirmed interest rates would not rise any time soon.

Speaking at his first post-meeting news conference during afternoon trading, Dr Bernanke reiterated that interest rates would remain unchanged and he wasn't sure when the process of rate tightening would begin. He also confirmed the Fed's $US600 billion bond-buying programme would end as planned in June.

Investors reacted positively to the announcements and stocks continued to rise through to the close (8am NZ time). The Dow Jones Industrial Average finished 95.82 points, or 0.8%, higher at 12,691.19.

The S&P 500 index ended up 0.6% at 1355.62 and the Nasdaq Composite was 0.8% higher at 2869.88.

Other markets: Europe up, Asia down
European stock markets pushed higher for the fifth consecutive session on upbeat earnings from Ericsson, Volkswagen and Renault and job cuts at Nokia.

The Stoxx Europe 600 index rose 0.3% to 282.12, extending its winning streak to five.

France's CAC-40 index gained 0.6% to 4067.72, Germany's DAX added 0.7% to 7404.95 and the UK's FTSE 100 index ended fractionally lower at 6068.16.

Asian stocks reversed course to end mostly lower ahead of US monetary policy announcements.

China's main stock indexes ended lower, undoing an earlier advance, amid concern the next round of tightening measures.

Japan's Nikkei Stock Average closed up 1.4% at 9691.84, but the Shanghai Composite Index ended 0.5% down at 2925.41, its lowest close in five weeks.

Hong Kong's Hang Seng Index finished down 0.5% at 23892.84, Australia's S&P/ASX 200 closed down 0.8%, at 4872.9, Korea's Kospi Composite ended little changed at 2206.70 and India's Sensex fell 0.5% to 19448.69.

Commodities: Gold at new record high, oil up
The most-actively traded gold contract, for June delivery, rose $US13.60, or 0.9%, to settle at a record $US1,517.10 an ounce in New York. The April contract expired at a record $US1516.70, up $US13.70, or 0.9%.

Crude-oil futures held modest gains as the US dollar weakened on Fed policy announcements. Light, sweet crude oil for June delivery was 53USc higher at $US112.74 a barrel in New York.

Currencies: US dollar slides on Fed news
Traders pushed the dollar to near 2½-year lows, emboldened by growing expectations the Fed is not about to end its ultra-loose monetary policies.

The US dollar fell more against the euro but held the bulk of its strong gains versus the yen after Standard & Poor’s lowered its outlook on Japan’s credit rating.

The euro jumped late in the day to $US1.4792, compared with $US1.4714 earlier and $US1.4684 late on Tuesday.