“U.S. stocks pushed higher after the Federal Reserve said it would introduce new asset purchases to replace its current stimulus program known as Operation Twist, which ends this month,” Jonathan Cheng reports for The Wall Street Journal. “The Dow Jones Industrial Average gained 65 points, or 0.5%, to 13314 in Wednesday afternoon trading, on the heels of a five-day run that has put the blue-chip Dow at its highest level since Oct. 22. Prior to the Fed announcement, the Dow was trading near the flat line for the day. The Standard & Poor’s 500-stock index rose 10 points, or 0.7%, to 1437, while the Nasdaq Composite added 10 points, or 0.3%, to 3032.”

“The moves came after the Fed said after its regular-scheduled December meeting that it would buy $45 billion in Treasurys each month, in addition to the $40 billion in mortgage-backed securities it purchases each month,” Cheng reports. “It said that it would keep interest rates at near-zero rates as long as the unemployment rate remains above 6.5% and inflation remains in check. Fed Chairman Ben Bernanke will hold a press conference at 2:15 p.m.”

Cheng reports, “‘If they’re going to keep their accommodative policy until the unemployment rate gets to 6.5%, they’ll be at it for a long time,’ said Keith Bliss, senior vice president at Cuttone Co. ‘It’s clear to me that they’re trying to inflate assets and really gin up consumer spending… I expect we’ll get that initial pop, but then people will step back and say, ‘What is the real efficacy of this for the real economy?’ And it’s getting less and less with each effort.'”

“Separately, investors continued to watch negotiations on the ‘fiscal cliff,’ a bundle of tax increases and spending cuts set to take place in the new year, provided Congress doesn’t act to avert those changes. On Wednesday, House Majority Leader Eric Cantor seemed to dampen hopes of a near-term breakthrough. Late Tuesday, President Barack Obama said that he was optimistic about budget talks between him and House Speaker John Boehner,” Cheng reports. “Apple inched up after The Wall Street Journal reported the technology giant is working with Asian component suppliers to test designs for televisions, including large-screen high-resolution TVs.”

Read more in the full article here.