Wall Street surges on Fed news

Investors respond positively to statement despite news of taper.

United States stocks have surged on the latest monetary policy update from the Federal Reserve, despite it highlighting plans to cut its asset-purchase program by $US10 billion.

At 0615 AEDT, the Dow Jones Industrial Average had climbed 120.79 points, or 0.76%, to 15,996.05.

The broad-based S&P 500 increased 7.58 points, or 0.43%, to 1,788.58, while the tech-heavy Nasdaq Composite Index bucked trend, inching down 2.44 points, or 0.06%, to 4,021.24.

Markets had largely traded flat in the lead up to the Fed announcement.

The Fed policy statement was released at 0600 AEDT and will be followed by a 0630 AEDT news conference with Fed Chairman Ben Bernanke.

European stock markets were strong following good German business confidence data and improved British unemployment.

The German DAX and the French CAC 40 both added 1 per cent, while the British FTSE 100 increased a more sedate 0.1% despite news of British unemployment hitting a four and a half year low.