NEW YORK, Aug. 10 (Xinhua) -- The U.S. stocks surged in the last hour trading on Tuesday and nearly regained Monday's huge losses after the Federal Reserve decided to keep the ultra-low interest rate unchanged for at least two years.
After huge losses on Monday due to first-ever downgrade of U.S. credit rating by Standard & Poor's, the markets rebounded on Tuesday. All three major indexes in New York stock markets opened higher.
In a statement released late Tuesday, the Fed decided to keep its key interest rate level at record low of 0 to 0.25 percent for at least two years, in an effort to support the fragile economy.
The Fed also said that it expected "a somewhat slower pace of recovery over coming quarters", which raised concerns about the economic prospects.
The markets slipped immediately after the release, however, managed to reverse the losses in last hour of trading and nearly regained last trading day's losses. The Dow Jones Industrial Average were up more than 400 points to close at 11239.47. S&P 500 index surged 4.74 percent to close at 1172.53. Nasdaq Composite index increased 5.29 percent to 2482.52
All ten sectors of S&P 500 rose with basic materials, financials and energy among the biggest advancers. The CBOE Volatility Index, which is widely accepted as the best gauge of fear in the market, plunged 20 percent, after a 50-percent surge on Monday.