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Dow hits 2-year high on Fed stimulus promise

The Dow Jones industrial average reached its highest level in two years Wednesday after the Federal Reserve announced plans to buy $600 billion in Treasurys to stimulate the economy.

The central bank had hinted for two months that it planned a major bond-buying program to encourage borrowing and spending by lowering interest rates. The Fed made more explicit commitments in its announcement than many investors had been expecting, which helped push stock indexes and most Treasury prices higher.

The Dow gained 26.41 points, or 0.2 percent, to 11,215.13, its highest close since the peak of the financial crisis in September 2008. The Standard & Poor's 500 Index rose 4.39, or 0.4 percent, to 1,197.96, while the Nasdaq composite gained 6.75, or 0.3 percent, to 2,540.27.

"The Fed's move takes a lot of uncertainty out of the air," said Anthony Chan, the chief economist for JPMorgan Chase's private wealth management division. "This puts a floor on the economy's performance and gives them the opportunity to do more if the economy needs it."

The central bank's program may continue to push stock prices higher if it succeeds in reigniting economic expansion.- AP

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