US futures rally on aggressive Fed action

NEW YORK (AP) ? U.S. futures rose after bold new actions from the Fed intended to revive the sluggish U.S. economy sent the Dow to the highest close since December 2007 when the recession started.

The government also released new data on retail sales and consumer prices.

Dow Jones industrial futures added 41 points to 13,486. The broader S&P futures have tacked on 4.4 points to 1,454.80. Nasdaq futures rose 11 points to 2,832.

The decision by the Federal Reserve to buy $40 billion a month in mortgage bonds until the U.S. economy shows a sustained recovery, the first time it's ever tied the length of a program to its success, sent markets higher across the globe, and commodities as well.

Britain's FTSE 100 rose 1.5 percent to 5,907.43. Germany's DAX gained 1.44 percent to 7,415.87 and France's CAC-40 added 1.98 percent to 3,571.30.

Oil prices rose above $100 for the first time since May and gold prices surged and appear to be headed for $1,800 per ounce.

New data from the government, however, suggests that consumers remain pessimistic. The mood of the consumer is crucial because that type of spending drives about 70 percent of economic growth in the U.S.

The Commerce Department reported Friday that retail sales increased in August to a seasonally adjusted 0.9 percent, but that's largely due to higher gasoline prices.

Spending elsewhere was sketchy, with people holding on to their money out of concern about the job market and the economy as a whole.

Outside of spending on fuel or automobiles, sales rose only 0.1 percent, which is a slowdown compared with July.

And the cost of fuel drove up consumer prices in August by the most in three years, according to the Labor Department. Without higher energy costs, inflation was static.

Also on Friday, the S&P Dow Jones Indices announced that the insurance company UnitedHealth Group would replace Kraft Foods on the listing.

Shares of Kraft edged lower before the market opened.

Source: http://news.yahoo.com/us-futures-rally-aggressive-fed-action-120342170--business.html

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