U.S. stocks extend gains on Fed language; Dow rises 0.64%

U.S. stocks carried Wednesday's gains into Thursday as investors applauded a Federal Reserve decision to keep benchmark interest rates low for some time to ensure the economy continues to strengthen.

At the close of U.S. trading, the Dow 30 rose 0.64%, the S&P 500index rose 0.49%, while the NASDAQ Composite index rose 0.68%.

The Volatility S&P 500 index, which measures the outlook for market volatility, was down 4.82% at 12.04.

The Federal Reserve on Wednesday said that it will likely close its monthly bond-buying program in October and suggested it will raise interest rates in 2015.

The Fed added interest rates will hover just above zero for a "considerable time" after it closes its easing program, but the U.S. central bank also suggested it could begin hiking benchmark borrowing costs faster than anticipated once it decides to start tightening policy.

Still, stocks rose on anticipation for interest to remain low for a while as the economy gains steam, with financials posting solid gains in the rally.

A mixed bag of data failed to seriously dampen Thursday's gains, as investors shrugged off soft housing data and focused on upbeat numbers out of the labor market.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Sept. 13 fell by 36,000 to 280,000, the lowest level since mid-July, from the previous week’s revised total of 316,000.

Analysts had expected jobless claims to fall by 11,000 to 305,000 last week.

Separately, the U.S. Commerce Department said that the number of building permits issued last month dropped by 5.6% to 998,000 units from July’s total of 1.057 million.

Analysts expected building permits to fall by 0.4% to 1.045 million units in August.

In company news, Oracle Corporation (NYSE:ORCL) CEO Larry Ellison stepped down as CEO though he will become executive chairman and chief technology officer, while Sears Holdings Corporation (NASDAQ:SHLD) shares took a hit earlier after Credit Suisse analyst Gary Balter said the department store should liquidate.

Leading Dow Jones Industrial Average performers included Dupont Fabros Technology Inc (NYSE:DFT), up 2.84%, Goldman Sachs Group Inc (NYSE:GS), up 1.68%, and J P Morgan Chase & Co (NYSE:JPM), up 1.67%.

The Dow Jones Industrial Average's worst performers included Exxon Mobil Corporation (NYSE:XOM), down 0.47%, Chevron Corporation (NYSE:CVX), down 0.46%, and General Electric Company (NYSE:GE), down 0.21%.

European indices, meanwhile, ended the day higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 0.89%, France's CAC 40 rose 0.75%, while Germany's DAX rose 1.41%. Meanwhile, in the U.K. the FTSE 100 rose 0.57%.