US mkts close higher on Fed's commitment for low int rates

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The US markets closed higher after the Federal Reserve held benchmark rates near zero and renewed its pledge to keep them exceptionally low for an extended period.

The S&P 500 closed at highest levels since October 2008. The dollar index slipped to a fresh session low also helped sentiment.

In other important economic data, Housing starts for February hit a higher-than-expected rate of 5.75 lakh and building permits for February made a smaller-than-expected dip to an annualized rate of 6.12 lakh.

The Dow Jones Industrial Average closed 0.41% or 43.83 points higher at 10,685.98. The Nasdaq Composite ended at 2,378.01, up 15.80 points or 0.67% and the S&P 500 was at 1,159.46, up 8.95 points or 0.78%.

The US Federal Reserve renewed its pledge on Tuesday to keep interest rates near zero for an "extended period" even as it sounded more upbeat about jobs. Still, it repeated its view that the economy's recovery would likely be moderate for a time and that inflation was likely to remain subdued.

The US Central Bank said that the Fed's policy continues to anticipate that economic conditions, including low rates of resource utilisation, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the Federal funds rate for an extended period.

John Kilduff, CIO of Round Earth Capital Co said, "Not only did the Fed do pretty much what people had expected but with the Greece situation seemingly resolving itself that buoys the Euro once again and that feeds right into this fiscal policy that's going to pressure the dollar. And while the dollar has quietly risen and the oil prices have gone along with it because of some fundamental factors, now oil gets another leg higher on a weakening currency."