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Nov. 2 (Bloomberg) -- U.S. stocks maintained gains after Federal Reserve policy makers raised their assessment of the economy while saying “significant downside risks” remain.
The Standard & Poor’s 500 Index climbed 1.5 percent to 1,236.84 at 12:34 p.m. in New York.
The Fed refrained from taking any additional steps to ease monetary policy.
“Economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year,” the Federal Open Market Committee said today in Washington after a two-day meeting. At the same time, it repeated that “there are significant downside risks to the economic outlook, including strains in global financial markets.”
The S&P 500 fell 5.2 percent during the first two days of this week after Greek Prime Minister George Papandreou planned a referendum to allow voters to decide if Greece should accept a European-led bailout, spurring concern the rescue would be rejected and the nation would be forced to default on its debt.
Yesterday’s slump followed an 11 percent rally in the S&P 500 in October, its best monthly gain since 1991. Last month’s advance was triggered by better-than-estimated earnings and economic data and growing confidence that European leaders would succeed in taming the region’s debt crisis.
Profits for companies in S&P 500 climbed 19 percent on average in the third quarter, based on results reported so far. Earnings are beating analyst predictions by 5.8 percent, compared with an average rate of 3.3 percent since 2005, the data show. Almost 3 companies are exceeding forecasts for each that doesn’t, matching with an average since 2005, the data show.
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