NEW YORK (AP) - The stock market staged a huge rally Thursday after investors got the aggressive economic help they wanted from the Federal Reserve.
The Dow Jones industrial average spiked more than 200 points and cleared 13,500 for the first time since the beginning of the Great Recession. The average is within 625 points of its all-time high.
The Fed said it would spend $40 billion a month, for as long as it takes, to stimulate the economy by buying mortgage securities - and perhaps buy more if the job market doesn't improve.
The central bank also extended its pledge of super-low short-term interest rates into 2015, extended a program to drive down long-term rates and promised to maintain "highly accommodative" policy even after the economy strengthens.
It was the package known as QE3 - a third round of quantitative easing, in market-speak. And it was just what investors were hoping for.
The Dow closed up 206.51 points, the seventh-biggest gain this year, at 13,539.86, its highest close since the last days of December 2007, the first month of the recession.
The broader Standard & Poor's 500 index was up 23.43 points at 1,459.99, also its highest since December 2007. The Nasdaq composite index, which has been trading at its highest levels since 2000, was up 41.52 at 3,155.83.
The stock market had already enjoyed a summer rally, in part because investors were betting on more Fed action. The Dow has climbed more than 1,100 points since the start of June.
Still, stocks spiked Thursday in industries across the economy. Materials companies, which tend to do well when the economy picks up, enjoyed the biggest gain - 2.6 percent as a group. Bank stocks also surged.
This is the third round of bond-buying by the Fed since the financial crisis struck in the fall of 2008. The goal is to lower long-term interest rates, get people to borrow and spend more and push investors into stocks.