US close: Dow Jones rallies more than 520 points to fresh record

dl nyse new york stock exchange new york city nyc wall street wall st nasdaq markets trading finance unsplash — Sharecast / David Vives via Unsplash

Wall Street stocks closed sharply higher on Thursday as traders celebrated the Federal Reserve's decision to slash interest rates by half a percentage point.

At the close, the Dow Jones Industrial Average was up 1.26% at 42,025.19, while the S&P 500 advanced 1.70% to 5,713.64 and the Nasdaq Composite saw out the session 2.51% firmer at 18,013.98.

The Dow closed 522.09 points higher on Thursday, easily reversing losses recorded in the previous session as the blue-chip index steamed ahead to a fresh record high.

The US central bank cut its overnight lending rate to a range of 4.75% to 5% over night, down from 5.25% to 5.5%, which surprised many investors and analysts with its first rate reduction in four years, most of which were expecting a 0.25% cut.

On the macro front for Thursday, Americans lined up for unemployment benefits at a decelerated pace in the week ended 14 September, according to the Labor Department, beating market expectations. Initial jobless claims fell by 12,000 to 219,000, a four-month low that, while better than market expectations for a reading of 230,000, remained well above the average seen earlier in 2024.

Elsewhere, manufacturing activity in the Philadelphia region unexpectedly expanded in September after contracting sharply the previous month, though current indicators for the industry still remain mixed. According to the Federal Reserve Bank of Philadelphia, the current general activity index for manufacturing jumped from a seven-month low of 7.0 in August to 1.7 last month, surpassing the -1.0 reading expected by economists

Finally, existing US homes sales fell in August despite a fall in mortgage rates during the month, according to data published on Thursday. Sales decreased 2.5% month on month to a 3.86 million, the National Association of Realtors said. House prices continued to rise, with the median on an existing home rising 3.1% to a new record high of $416,700.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Salesforce.Com Inc. (CRM) $265.85 5.37%
Caterpillar Inc. (CAT) $373.32 5.12%
Goldman Sachs Group Inc. (GS) $503.83 3.97%
Apple Inc. (AAPL) $228.87 3.71%
American Express Co. (AXP) $268.68 2.51%
Dow Chemical Co. (DOW) $52.91 2.42%
Microsoft Corp. (MSFT) $438.69 1.83%
Intel Corp. (INTC) $21.14 1.78%
Cisco Systems Inc. (CSCO) $51.44 1.72%
Home Depot Inc. (HD) $390.34 1.65%