* U.S. dollar slide continues after Fed's Bernanke speaks
* Wall Street rallies on signs rates to stay pat
* U.S. bond prices add to losses after Fed statement
* Fed signals no rush to scale back U.S. economic support
(Adds close of U.S. markets)
By Al Yoon and Herbert Lash
NEW YORK, April 27 Global stocks rallied and
the U.S. dollar slid to a three-year low against major
currencies on Wednesday after the Federal Reserve signaled it
would retain extensive support for the U.S. economy.
Wall Street advanced broadly and oil rose after the Fed
said in a statement it believed the recovery was proceeding at
a moderate pace and pledged to keep interest rates, now near
zero, extraordinarily low for "an extended period." For details
The Nasdaq surged to a 10-year high and gold rose to a
record above $1,525 an ounce after Fed chairman Ben Bernanke
reiterated the Fed's stance that inflation was a transitory
problem related largely to commodity price pressures.
Bolstered by bullish comments from General Electric (GE.N)
and another round of better-than-expected earnings, this time
from Boeing Co (BA.N), Whirlpool Corp (WHR.N) and WellPoint Inc
WLP.N, stocks staged a late-day rally.
Investors' high marks for Bernanke also boosted optimism.
"He struck the right balance between education,
straightforwardness and the limitations of making policy in an
uncertain world," said David Joy, chief market strategist at
Columbia Management in Boston.
"He even closed with a note of optimism," Joy said about
the first news conference by a Fed chief in the U.S. central
bank's 97-year history.
The Nasdaq Composite Index closed at the highest for the
technology-rich index since Dec. 12, 2000 while gold XAU= set
its eighth record high in nine trading sessions.
The Dow Jones industrial average .DJI closed up 95.59
points, or 0.76 percent, at 12,690.96. The Standard & Poor's
500 Index .SPX gained 8.42 points, or 0.62 percent, at
1,355.66. The Nasdaq Composite Index .IXIC rose 22.34 points,
or 0.78 percent, at 2,869.88.
The dollar, which has been under persistent pressure in
recent months, slid further when Bernanke forecast weaker U.S.
growth in the first three months of 2011.
The dollar fell to its lowest since 2008 against a basket
of six currencies. The dollar index .DXY slid as low as
73.261, not far from an all-time low of 70.698 hit in July
The euro EUR= was up 0.96 percent at $1.4782, while the
dollar JPY= was up 0.72 percent at 82.09 yen against the
Bernanke's comments came after the policy-setting Federal
Open Market Committee said that it intends to end its $600
billion bond-buying program in June as scheduled and suggested
it would not let its balance sheet run down immediately.
The language, along with a continued showing of solid
corporate earnings, helped bolster Wall Street's gains.
"The tweaks in the QE2 language strongly suggest they are
going to continue not only with QE2 but reinvesting mortgage
cash flows," said Max Bublitz, chief investment strategist at
SCM Advisors in San Francisco.
The price of U.S. 30-year Treasury bonds fell to session
lows, losing more than 1 point, after the Fed raised its
inflation forecasts. [ID:nNYE003011]
The 30-year bond US30YT=RR was down 1-1/32 in price to
yield 4.46 percent. The benchmark 10-year U.S. Treasury note
US10YT=RR yielded 3.36 percent, down 13/32 in price.
Crude prices rose in choppy trading after government data
showed declining U.S. gasoline stockpiles. [ID:nL3E7FR0CO]
U.S. crude oil for May delivery CLc1 settled at $112.76 a
barrel, gaining 55 cents. In London, May Brent crude LCOc1
closed at $125.13 a barrel, up 99 cents.
(Reporting by Ryan Vlastelica and Richard Leong in New York
and Harpreet Bhal Alex Lawler and Amanda Cooper in London;
Writing by Herbert Lash; Editing by James Dalgleish)