By Aleksandra Michalska
NEW YORK (Reuters) - U.S. stocks pared gains but were up for the fourth straight day on Friday on the Federal Reserve's aggressive new plan to stimulate the economy.
Equities are in the midst of a run-up in which the S&P 500 has posted gains for four consecutive months, fueled by the actions of Europe's and the United States' central banks to keep interest rates low and stimulate their struggling economies.
The Fed's announcement Thursday that it would keep up its aggressive bond-buying until the labor market improved was unprecedented. It boosted the benchmark S&P 500 index to its highest close since December 2007.
"The Fed did something that is open-ended. It goes a long to help people feel a little bit more confident," said Warren West, principal at Greentree Brokerage Services.
The Dow Jones industrial average was up 28.73 points, or 0.21 percent, at 13,568.59. The Standard & Poor's 500 Index was up 4.90 points, or 0.34 percent, at 1,464.89. The Nasdaq Composite Index was up 29.71 points, or 0.94 percent, at 3,185.53.
Bank of America-Merrill Lynch on Friday initiated a 2013 target of 1,600 for the S&P 500, a level that would represent a new high for the benchmark index.
The target "implies a 10 percent price return, where most of the appreciation can be attributed to earnings growth of 7 percent next year," wrote Savita Subramanian, head of U.S. Equity and Quantitative Strategy.
The Fed move pushed the dollar down 0.5 percent against other major currencies, boosting some commodities. Miner Freeport-McMoran Copper & Gold Inc
Data on retail sales and industrial production pointed to modest economic growth in the third quarter. The Thomson Reuters/University of Michigan's preliminary September consumer sentiment index rose to its highest level in four months as Americans were more upbeat about their economic and job prospects.
S&P Dow Jones Indices said UnitedHealth Group Inc
Shares of Staples
(Editing by Dave Zimmerman.ixic)