US stocks rise after Fed leaves interest rates alone

Wall Street overcame disappointment in the Federal Reserve’s failure to move toward an easing of interest rates today, and stocks made a late-day surge as the decision was seen as a sign the economy wasn’t threatened by turmoil in the credit markets.

Investors were at first deeply disappointed that policymakers, who kept benchmark rates on hold at 5.25 percent, did not provide any hints about a possible cut. But, after digesting the policy statement, they quickly gained solace that the economy is likely to withstand losses from subprime mortgages.