Dow, S&P close at record highs as Fed shocks the markets

|By:, SA News Editor

The S&P and Dow rose to record closing highs after the Fed surprisingly refrained from QE taper, saying it will "await more evidence that progress will be sustained before adjusting the pace of its purchases."

But how long can the gains last? Fed inaction could easily be perceived as an admission that the economy is fundamentally weak.

All key S&P sectors closed in positive territory, propelled by utilities, which have underperformed amid expectations of the Fed starting to end its bond buys.

Home builders rallied sharply following the Fed news, with KB Home and Ryland each surging more than 5%.

Traders stampeded into Treasurys, with the benchmark 10-year yield tumbling 14.5 bps to 2.708%, ending on its 50-day moving average; the dollar fell sharply.

Crude oil climbed 2.5% to $108.07, also supported by a big weekly drop in U.S. inventories; gold jumped nearly 3% above its settlement to $1,345.40.