Stocks Ended Up after Fed Rate Promise

U.S. stocks closed sharply higher Wednesday, as big profits from Apple and a promise from the Federal Reserve to keep rock-bottom rates for at least two more years powered the market. The Dow Jones Industrial Average rose 83.10 points, or 0.66%, to 12,758.85. The S&P 500 gained 11.41 points, or 0.87%, to 1,326.06. The Nasdaq Composite jumped 31.67 points, or 1.14%, to 2,818.31.

Federal Reserve Chairman Ben Bernanke signaled on Wednesday the central bank may consider further monetary easing, after the central bank announced interest rates would remain near zero until late 2014. Bernanke also suggested the Fed might be willing to tolerate inflation above its newly unveiled official target of 2 percent if it means putting a dent in high unemployment.

Airbus blamed a recent series of A380 wing cracks on a combination of design and manufacturing flaws and said it had worked out a two-stage solution, while stressing the superjumbo was in the meantime safe to fly.

Video rental provider Netflix Inc. said Wednesday that its fourth-quarter profit fell 13% on a decrease in subscriptions to the DVD portion of its business, but the results handily beat most estimates. The company said it earned $41 million, or 73 cents a share, on revenue of $876 million, compared with year-earlier net income of $47 million, or 87 cents a share, on revenue of $596 million.

Billionaire investor George Soros on Wednesday minced no words on the financial troubles faced by the Europe Union, as he addressed the future of the currency block before an audience in Davos. Soros said that Europe is mired in a “spiral of decline” that reinforces itself, adding that, as things stand, “Weaker members of the euro zone are being left as Third World countries that borrowed in foreign currencies.”

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