* Fed to keep buying $85 bln per month in assets
* Aetna shares rise after outlook
* Dow up 0.2 pct; S&P 500 up 0.4 pct; Nasdaq off 0.01 pct
NEW YORK, Dec 12 The S&P 500 climbed to a
seven-week high on Wednesday after the U.S. Federal Reserve
announced a new stimulus plan, its latest attempt to boost the
country's struggling economy.
The S&P 500 ticked up as high as 1,438 . 59, its highest
intraday level since Oct. 22, with all 10 industry sectors in
positive territory. Financials led the advance, with the S&P
financial sector index up 0.7 percent.
The new plan will replace a more modest program set to
expire with a fresh round of Treasury purchases that will
increase its balance sheet.
"The actions by the Fed were more aggressive than investors
anticipated," said Michael Sheldon, chief market strategist at
RDM Financial in Westport, Connecticut.
"The asset-purchasing program is probably larger and more
comprehensive than some might have thought."
The central bank committed 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.
The Dow Jones industrial average gained 22.95 points,
or 0.17 percent, to 13,271.39. The Standard & Poor's 500 Index
rose 4.40 points, or 0.41 percent, to 1,432.24. The
Nasdaq Composite Index dipped just 0.25 of a point, or
0.01 percent, to 3,022.05.
Negotiations over plans to avoid the "fiscal cliff"
intensified in Washington, but U.S. House of Representatives
Speaker John Boehner said on Wednesday that "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 early 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.
Shares of Aetna, the third-largest U.S. health
insurer, jumped 4 percent to $46.26 a day after the company gave
a higher forecast for profit and revenue growth in 2013.
But Wal-Mart Stores Inc fell 2.7 percent to $69 as
the largest drag on the Dow following the Indian government's
announcement of an inquiry into the company's lobbying