Stocks Rise With Interest Rates Remaining Low

A surge in investor confidence sent stocks soaring once the Federal Reserve announced its key interest rates should stay at historic lows for the foreseeable future.

The Dow Jones industrial average jumped 43.91 points, or 0.41%, to 10,686.06. The Nasdaq composite climbed 15.80, or 0.67%, to 2,378.01. The S&P 500 index gained 8.96, or 0.78%, to 1,159.47.

The S&P Smallcap 600 and Russell 2000 are two of the most widely watched barometers of penny stocks. The S&P gained 1.73, or 0.48%, to 359.89. The Russell gained 3.30 or 0.49%, to 677.71.

The so-called fed fund rate is a benchmark that determines the interest paid by consumers and businesses on a wide variety of loans. It’s been near 0% since December 2008 and is expected to remain unchanged for several more months.

Keith Hembre is the chief economist at First American Funds. He said he thinks the Fed could raise rates late this year or early next year.

Decision makers at the Fed have not chosen extend a program designed to drive down mortgage rates and bolster the housing market. The Fed is still scheduled to end its mortgage-securities purchases from Fannie Mae and Freddie Mac at the end of this month.

Housing: New construction fell in February. The wicked winter weather is getting the blame.

The Commerce Department said Tuesday that construction of new homes and apartments fell 5.9% in February to a seasonally adjusted annual rate of 575,000 units.

Activity dropped by 9.6% in the Northeast and 15.5% in the South. The volatile multi-family sector plunged 30.3% to an annual rate of 76,000 units after having surged 18.5% in January.

The National Association of Home Builders reported Monday that its survey of builder sentiment dropped by two points to 15 in March. Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006.

Commodities and the dollar: High oil prices continued to climb against a diminishing dollar.
Light crude surged 1.90, or 2.38%, 81.70 a barrel.

Gold leaped 17.10, or 1.55%, to 1,122.20 an ounce on the New York Mercantile exchange.