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US markets end higher as Fed seen taking dovish stance

The US markets settled higher on Wednesday, with the Dow Jones Industrial Average reclaiming 25,000 level for the first time in over a month, after the Fed announced its widely expected decision to leave interest rates unchanged and indicated the central bank will remain patient regarding further rate hikes. The Fed said following a two-day meeting it has decided to maintain the target range for the federal funds rate at 2.25 to 2.50 percent. The accompanying statement included some notable changes from last month, including dropping a reference to the Fed's plan for further gradual rate increases. The central bank also removed a sentence describing the risks to the economic outlook as roughly balanced. Besides, Strong earnings from Boeing and Apple also boosted the markets. Apple surged 6.8 percent after reporting a quarterly profit that barely beat estimates. The company's overall quarterly revenue topped expectations, but iPhone sales for the quarter came in below estimates. Boeing shares rose 6.25 percent after its quarterly earnings easily beat expectations. The aerospace giant also posted annual revenue of more than $100 billion for the first time and gave strong earnings guidance for 2019.

On the economic front, reflecting several negative factors, the National Association of Realtors (NAR) released a report unexpectedly showing a continued decrease in US pending home sales in the month of December. NAR said its pending home sales index tumbled by 2.2 percent to 99.0 in December after falling by 0.9 percent to a downwardly revised 101.2 in November. The continued decline in pending home sales has surprised participants, who had expected the index to climb by 0.5 percent. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. Compared to the same month a year ago, pending home sales plunged by 9.8 percent, reflecting the twelfth straight month of annual decreases. Meanwhile, after reporting a substantial increase in US private sector employment in the previous month, payroll processor ADP released a report showing the pace of job growth slowed in January but still far exceeded analyst estimates. ADP said private sector employment jumped by 213,000 jobs in January after soaring by a downwardly revised 263,000 jobs in December. Street had expected employment to increase by about 178,000 jobs compared to the spike of 271,000 jobs originally reported for the previous month.

Dow Jones Industrial Average surged 434.90 points or 1.77 percent to 25014.86, Nasdaq rose 154.79 points or 2.20 percent to 7183.08 and S&P 500 was up by 41.05 points or 1.55 percent to 2681.05.

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