NEW YORK, Sept. 14 (Xinhua) -- U.S. stocks continued to rally on Friday, driven by the decision of the Federal Reserve to launch a new round of quantitative easing policy, as major indexes shot up to multi-year highs.
When the market closed, the Dow Jones industrial average rose 53.51 points, or 0.40 percent, to 13,593.37. The Standard & Poor's 500 Index was up 5.78 points, or 0.40 percent, to 1,465.77. The Nasdaq Composite Index jumped 28.12 points, or 0.89 percent, to 3, 183.95.
According to a statement released after Thursday's policy meeting, the central bank decided it would spend 40 billion U.S. dollars a month purchasing mortgage-backed securities until the labor market recovered substantially, the first time the Fed has tied a stimulus program to an economic outcome.
The Fed also decided to keep its ultra-low federal funds rate unchanged at least through mid-2015 and continued its so-called Operation Twist program to the end of this year, showing the Fed's determination to supporting job markets and economic recovery.
Following the announcement of the bond-buying plan, the three major indexes all surged by more than 1 percent when the markets closed on Thursday.
The rally continued on Friday, with major indexes ending higher for the fourth day in a row. The tech-heavy Nasdaq gained most among three major indexes, boosted by Apple as the tech giant hit a new record high after its new iPhone 5 sold out within only one hour in the on-line presale.
The week had started as investors cautiously awaited decisions of the German Constitutional Court and the Fed, and trading volumes were low.
The German Court on Tuesday approved the ratification of the bailout fund, the European Stability Mechanism (ESM), paving the way for the permanent bailout fund and other crisis-battling instruments to go into operation.
In addition, the Fed's easing boosted international commodities prices as it triggered a capital flow to riskier assets such as equities and crude oil.
Light, sweet crude for October delivery gained 69 cents, or 0. 70 percent, to settle at 99.00 dollars a barrel on the New York Mercantile Exchange, hitting the highest level since May 4.
However, some analysts doubt if the Fed stimulus policies would continuously help support the market and create new jobs. They argued that the indexes have rallied significantly and the gains may be an opportunity for investors to trim positions.
The U.S. dollar continued to slide against most of its major counterparts on Friday. The euro was up as high as 1.3169 dollars, the first time above the level of 1.3100 since early May.
On the economic front, Labor Department data released Friday showed the consumer price index rose 0.6 percent in August, the largest in more than three years, reflecting higher fuel prices. Meanwhile, the Commerce Department reported retail sales increased by 0.9 percent in August, more than the revised 0.6- percent rise of July, mainly driven by larger demand for automobiles.