Wall St edges up in wake of Fed; Exxon a boost

NEW YORK (REUTERS) - United States (US) stocks edged up on Thursday, though trading was subdued a day after a Federal Reserve policy announcement that kept its stimulus plan in place.

While Thursday's rise was modest, stocks were headed for strong gains in October. The Dow was up about 3 per cent as the month drew to a close, while the S&P 500 was up about 5 per cent and the Nasdaq rose 4.5 per cent.

Shares of Exxon Mobil Corp, the world's largest publicly traded oil company, helped support the Dow and S&P 500, rising 1.7 per cent to US$90.50 after the company reported adjusted third-quarter earnings that beat expectations.

The US central bank on Wednesday said it will keep buying US$85 billion (S$105 billion) of bonds per month, noting weaker economic signals.

But it removed a phrase from a previous statment expressing worries about credit conditions after a spike in bond yields, which investors interpreted as a sign the Fed could begin tapering earlier than expected.

"The Fed removed that language, and that leaves tapering on the table for December," said Mr Michael O'Rourke, chief market strategist at JonesTrading, referring to the Fed's eventual trimming of asset purchases.

The Fed's accommodative monetary policy in recent years has contributed to stocks' rally, and investors worry about the timing of a pullback by the Fed.

The Dow Jones industrial average inched up 27.50 points, or 0.18 per cent, to 15,646.09. The S&P 500 added 4.84 points, or 0.27 per cent, to 1,768.15. The Nasdaq Composite rose 13.75 points or 0.41 per cent, to 3,998.89.

Expedia jumped almost 18 per cent to US$58.61 and ranked as the S&P 500's best percentage gainer on the S&P 500 a day after reporting third-quarter earnings that exceeded expectations.

Limiting gains, Visa Inc lost 2.9 per cent to US$197.97, making it the biggest drag on the Dow a day after the world's largest credit and debit card company reported a 28 per cent drop in quarterly profit.

Thursday's economic data was mixed. A gauge of business activity in the Midwest execeeded expectations in October, while weekly initial jobless claims dipped in the latest week.

The Labor Department's October employment report will be an important source of clues about the economy and future Fed action. Until the figures, due Nov 8, are released "we're going to drift. We need something to send us higher", said Mr Brian Battle, director of trading at Performance Trust Capital.

Facebook reported strong growth in its mobile advertising business late on Wednesday, though it said it didn't plan to boost the frequency of ads shown to users. Facebook's stock was up 3.2 per cent at US$50.60.

Of the 355 companies in the S&P 500 that had reported earnings to Thursday morning, 68.2 per cent have topped Wall Street's expectations, above both the 63 per cent beat rate since 1994 and the 66 per cent beat rate for the past four quarters, according to Thomson Reuters data.

Revenue has been mixed, however, with 53.6 per cent of companies besting expectations, well shy of the 61 per cent beat rate since 2002 but above the 49 per cent rate for the past four quarters.