The looming Fed taper has been the talk of Wall Street for months, but it still came as a surprise to investors when it actually happened. Stocks rallied Wednesday following the Fed's decision to cut its $85 billion a month purchase of bonds by $10 billion, beginning in January. Outgoing Fed Chairman Ben Bernanke said the economy continues to "make progress."
The Dow Jones industrial average (^DJI) soared 292 points on the news, its third biggest one-day gain this year. The Dow also hit a closing high, as did the Standard & Poor's 500 index (^GPSC), which gained 29 points. And the Nasdaq composite (^IXIC) rose 46 points.
Consider it Bernanke's final present to the market before he retires from his position atop the Fed.
Among the big blue chip winners, 3M (MMM) rose 3 percent, while Exxon Mobil (XOM), Chevron (CVX) and Goldman Sachs (GS) all rose 2 percent.
But Microsoft (MSFT) was flat, reflecting across the board weakness in tech stocks.
Many of the biggest players on the Nasdaq lost ground despite the overall market rally. Apple (AAPL) and Twitter (TWTR) ended lower and Tesla (TSLA) lost nearly 3 percent.
Part of the reason for the tech weakness was an earnings miss and a weak forecast from Jabil Circuits (JBL), a key maker of electronics. Its shares plunged 20 percent.
%VIRTUAL-article-sponsoredlinks%But homebuilders were strong following a report showing that housing starts last month rose to highest level in nearly six years. Lennar (LEN), which also posted strong earnings, jumped 6 percent. William Lyon Homes rose 4 percent, KB Homes (KBH) and Toll Brothers (TOL) each rose 3.5 percent.
Ford (F) shares skidded more than 6 percent after lowering its profit forecast for next year. The company also warned that it may not meet its target for 2015 and 2016. In part, Ford blames the high expenses tied its planned launch of a record number of new vehicles next year.
Finally, the movie theater chain AMC Entertainment (AMC) rose 5 percent from its $18 a share IPO price. This is expected to the last of 222 IPOs to hit the market this year.
What to Watch Thursday:
The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
At 10 a.m., the National Association of Realtors releases existing home sales for November; Freddie Mac releases weekly mortgage rates; and the Conference Board releases leading indicators for November.
These major companies are scheduled to report quarterly financial results:
ConAgra Foods (CAG)
Darden Restaurants (DRI)
KB Home (KB)
Pier 1 Imports (PIR)
Rite Aid (RAD)
-Produced by Drew Trachtenberg.