U.S. Markets closed

US stocks sharply higher after Fed trims stimulus

The Associated Press
1 / 2
Trader Ryan Falvey, center, works on the floor of the New York Stock Exchange, Wednesday, Dec. 18, 2013. Stocks were modestly higher in early trading on Wall Street Wednesday as the Federal Reserve ends its last two-day policy meeting of 2013. Homebuilder stocks rose sharply after the government reported that construction of new homes surged in November. (AP Photo/Richard Drew)

NEW YORK (AP) — The stock market is up sharply after the Federal Reserve's surprise decision to dial back its economic stimulus, citing a stronger job market.

The Fed voted Wednesday to reduce its $85 billion in monthly bond purchases by $10 billion, starting in January. The Fed has been buying that amount of bonds for a year.

The Dow Jones industrial average was up 151 points, or 1 percent, to 16,028 as of 2:10 p.m. Eastern. It was up 47 points shortly before the Fed's announcement.

The Standard & Poor's 500 index rose 11 points, or 0.6 percent, to 1,792. The Nasdaq composite climbed five points, or 0.1 percent, to 4,028.