US stock markets touch new highs on Fed pledge to pump billions into economy

U.S. stock markets are perched at all-time highs after U.S. Federal Reserve Chairman Ben Bernanke said the central bank would continue to support the world’s biggest economy.

The Dow Jones industrial average rose 169 points, or 1.1 per cent, to close at 15,461 Thursday. The Standard & Poor’s 500 index rose 22 points, or 1.4 per cent, to 1,675.

Both indexes surpassed the record closes they set in May.

The tech-dominated Nasdaq composite rose 57 points, or 1.6 per cent, to 3,578.

Investors also bought bonds after being reassured that the Fed was not in a hurry to pull back on its huge bond-buying program.

In Canada, the Toronto stock market surged back into positive territory for the year after Bernanke reassured that the Fed’s economic stimulus measure isn’t going away any time soon.

The S&P/TSX composite index ran up 186 points to 12,493 after Bernanke said the U.S. economy still needs help from the Fed’s low interest rate policies.

Markets have been nervous that the Fed would soon start to slow down its monthly purchases of US$85 billion of bond purchases.

Those purchases have kept long term rates low and fuelled a rally on global markets.

The greenback weakened on Bernanke’s comments and the loonie surged 1.21 cents to 96.29 cents US.

New York’s Dow industrials jumped 169 points to 15,461, above its own all-time closing high of 15,409 from late May.

The Nasdaq gained 58 points to 3,578, well below its all-time high of just over five thousand from March, 2000.

Oil backed off $1.61 to US$104.91 a barrel the International Energy Agency said oil supplies would exceed the expected rise in demand next year, partly because of growing production in North America.

With files from Associated Press and Canadian Press