BOSTON (AP) -- Shares of homebuilders surged after the Federal Reserve said on Wednesday that it will continue its aggressive drive to keep long-term interest rates low, which encourages home buying and other economic activity.
The central bank concluded a two-day policy meeting by issuing a statement that it will spend $45 billion a month to purchase long-term Treasurys to replace an expiring bond-purchase program. The Fed also will continue buying $40 billion a month in mortgage bonds. The moves are intended to reduce already record-low long-term rates to encourage mortgage activity and other borrowing, and to accelerate growth.
Shares of major homebuilders gained modestly in early trading on Wednesday before rising more sharply following the Fed's midday statement.
In afternoon trading, shares of Lennar Corp. rose $1.57, or 4.3 percent, to $37.98; D.R. Horton Inc. added 76 cents, or 4 percent, to $19.32; PulteGroup Inc. gained 66 cents, or 4 percent, to $17.14; and Toll Brothers Inc. rose $1.44, or 4.7 percent, to $31.80.
Other builders trading higher included:
— NVR Inc., added $21.75, or 2.4 percent, to $932.61
— Meritage Homes Corp. rose $1.97, or 5.5 percent, to $37.96.
— M.D.C. Holdings Inc. gained $1.35, or 3.9 percent, to $35.66.
— Ryland Group Inc. added $1.76, or 5.5 percent, to $34.37.
— M/I Homes Inc. rose 51 cents, or 2.3 percent, to $22.64.
— Standard Pacific Corp. added 27 cents, or 4.1 percent, to $6.89.
— KB Home rose 71 cents, or 4.8 percent, to $15.44.
— Beazer Homes USA Inc. gained 50 cents, or 3.5 percent, to $14.98.
— Hovnanian Enterprises Inc. added 11 cents, or 2 percent, to $5.56.