(By Balachander) U.S. stocks extended its rally following the Federal Reserve's move to purchase mortgage bonds to stimulate the economy.
S&P 500 Index rose 0.40 percent to finish at 1,465.76. The Dow Jones Industrial Average added 0.40 percent to end at 13,593.37. The Nasdaq Composite Index gained 0.89 percent to close at 3,183.95.
The Fed announced plans to purchase mortgage bonds at a pace of $40 billion per month to spur growth and also decided to keep interest rates "exceptionally low" at least through middle of 2015. The central bank said it would continue its bond-purchase program until substantial improvement in the outlook for the labor market.
Fed Chairman Ben Bernanke justified the latest action from the central bank, saying new measures were needed to address persistently high levels of unemployment.
On the domestic data front, the Commerce Department reported August retail sales and core retail sales rose 0.9 percent and 0.8 percent, respectively. Economists expected a 0.7 percent and 0.6 percent rise each in retail sales and excluding autos sales.
Another data showed that core consumer price index inched up 0.1 percent in August, while economists expected a gain of 0.2 percent. The headline index gained 0.6 percent, coming in above expectations of a rise of 0.5 percent.
The Reuters/University of Michigan survey of consumer sentiment showed the index climbed to 79.2 for September from a reading of 74.3 in the prior month, surprising economists expectations of a reading of 73.5.
Hot Stocks Of The Day: AAPL, HD, SPLS, WDC, WERN, AKS, ALOG, ASGN
In corporate news, Apple Inc. (NASDAQ:AAPL) rose 1.22 percent amid reports that pre-orders for its iPhone 5 sold out within an hour after the newest smartphone became available on Apple's website on Friday.
Home Depot Inc. (NYSE:HD) gained 1.99 percent after the home improvement retailer said it will close all seven of its big box stores and slash 850 jobs in China.
Staples Inc. (NASDAQ:SPLS) added 2.09 percent after Fortune reported that private-equity firms, including Bain Capital, are considering buying the office products company.
Western Digital (NASDAQ:WDC) retreated 3.61 percent after the data storage company reduced its first-quarter revenue guidance, citing muted hard drive demand. FBN Securities downgraded rating on the stock to "Sector Perform" from "Outperform."
Werner Enterprises Inc. (NASDAQ:WERN) tumbled 7.35 percent after the transportation and logistics company guided third-quarter earnings below market expectations.
AK Steel Holding Corp. (NYSE:AKS) tumbled 8.85 percent after the West Chester, Ohio-based maker of flat-rolled carbon steels forecast a loss for the third quarter, wider than market expectations and year-ago levels. The company sees shipments of about 1.37 million tons in the third quarter, flat with the year-ago levels.
Genesee & Wyoming Inc. (NYSE:GWR) gained 2.79 percent after the operator of short line and regional freight railroads said it has priced class A common stock offering of 3.5 million shares at $64.75 apiece.
Analogic Corp. (NASDAQ:ALOG) surged 16.26 percent after the maker of medical imaging systems posted fourth-quarter earnings that more than doubled from last year amid a 12 percent rise in revenue. It forecasts high-single-digit organic revenue growth for 2013.
On Assignment Inc. (NYSE:ASGN) jumped 11.05 percent after the company announced pricing of public offering of about 5.17 million shares of its common stock by certain selling stockholders at $17.00 each. The offering by certain selling stockholders has been upsized from about 4.78 million shares.
European markets ended sharply higher, with Germany's DAX adding 1.39 percent to close at 7,412.13. France's CAC40 rose 2.27 percent to finish at 3,581.58. U.K.'s FTSE 100 jumped 1.64 percent to end at 5,915.55.
Asian markets closed sharply higher, with China's Shanghai Stock Exchange Composite Index adding 0.64 percent to finish at 2,123.85. Japan's Nikkei 225 gained 1.83 percent to end at 9,159.39. Hong Kong's Hang Seng Index rose 2.90 percent to close at 20,629.78. India's BSE Sensex closed at 18,464.27, up 2.46 percent.
Commodity & Currency Scan:
Crude oil futures added 0.67 percent to $98.97 per barrel while natural gas futures dropped 2.97 percent to $2.947 per million metric British thermal units. Gold futures inched up 0.11 percent to $1,774.1 per ounce while silver futures shed 0.22 percent to $34.70 per ounce.
In the currency market, the euro jumped 1.00 percent against the U.S. dollar to 1.3119. The British pound gained 0.45 percent against the greenback to 1.6227, and the dollar climbed 1.15 percent against the Japanese yen to 78.3700.