Dow rallies after Fed statement, up 429 points

After huge losses on Monday, the stock market sprang back up Tuesday, after the Fed announced it would hold interest rates low for the next two years

Richard Drew / AP
A trader strides across the floor of the New York Stock Exchange at the closing bell, Tuesday, Aug. 9, 2011. The Dow Jones industrial average closed up 429.92 points.

NEW YORK (AP) — U.S. stocks are rising at the closing of trading after the Federal Reserve said it has discussed policy moves it can make to spur the economy. The Fed also said growth has been slower than expected.

The Dow Jones industrial average is closing up 429 points, or 4 percent, to 11,239.77.

Stocks rallied in the last hour of trading. Stocks initially fell after the Fed made its statement, which included a pledge to keep interest rates at their record low until at least the middle of 2013.

The S&P 500 is up 53, or 4.7 percent , to 1,172.53. The Nasdaq is up 124, or 5.3 percent, to 2,482.52

The Dow had plunged 634 points Monday on the first day of trading since Standard & Poor's cut the U.S. credit rating.

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