* Fed to keep buying $85 bln per month in assets
* Aetna shares rise after outlook
* Dow up 0.5 pct; S&P 500 up 0.6 pct; Nasdaq up 0.3 pct
By Gabriel Debenedetti
NEW YORK, Dec 12 U.S. stocks rose to seven-week
highs on Wednesday after the U.S. Federal Reserve announced a
new stimulus plan, its latest attempt to boost the country's
The new plan will replace a more modest program due to
expire with a fresh round of Treasury purchases that will
increase its balance sheet, as was widely expected.
The S&P 500 ticked up as high as 1438 . 59, its highest
intraday level since October 22, with all 10 industry sectors in
positive territory. Financials led the advance, with the S&P
financial sector index up 1.1 percent.
"It is good for stocks and risk more generally. And they
came out with an economic data point as a guideline. That's very
important, because it helps the market anticipate an exit
strategy," said Quincy Krosby, market strategist at Prudential
Financial, in Newark, New Jersey.
The central bank conmitted to monthly purchases of $45
billion in Treasuries on top of the $40 billion per month in
mortgage-backed bonds it started buying in September. It also
said it will keep its near-zero interest-rate program in place
until the U.S. unemployment rate falls to 6.5 percent from its
current 7.7 percent.
Negotiations over plans to avoid the "fiscal cliff"
intensified in Washington, but U.S. House of Representatives
Speaker John Boehner said on Wednesday "serious differences"
remain with President Barack Obama in their talks. If no
agreement is reached, steep tax hikes and budget cuts will fall
into place next year.
The S&P 500 was up for a sixth straight day, its longest
winning streak since August, although gains have been less than
0.5 percent per day, on average, in part due to uncertainty over
the cliff negotiations.
The Dow Jones industrial average climbed 65.18
points, or 0.49 percent, to 13,313.62. The Standard & Poor's 500
Index rose 8.83 points, or 0.62 percent, at 1,436.67. The
Nasdaq Composite Index gained 7.70 points, or 0.25
percent, at 3,030.00.
Shares of Aetna, the third-largest U.S. health
insurer, jumped 4.5 percent to $46.52 a day after the company
gave a higher forecast for profit and revenue growth in 2013.
But Wal-Mart Stores Inc fell 2.3 percent to $69.24
as the largest drag on the Dow following the Indian government's
announcement of an inquiry into the company's lobbying
Shares of Berkshire Hathaway rose 2.8 percent to
$134,500 after the company announced a $1.2 billion stock
repurchase and raised the price at which it is willing to buy