Stocks log best month since Jan. on Fed pledge

NEW YORK — After a day of stalled rallies, the stock market closed out July with its best monthly gain since January.

The Standard & Poor’s 500 index ended the month 4.95 percent higher. That’s the biggest increase since January, when it rose 5.04 percent. The Dow Jones industrial average also had its best month since January.

Markets surged in July after Federal Reserve Chairman Ben Bernanke assured investors that the central bank wouldn’t pull back on its stimulus program until the economy was strong enough. The central bank is buying $85 billion of bonds a month to keep down interest rates to encourage borrowing and hiring.

The Standard & Poor’s 500 index ended little changed at 1,685.73. The Dow Jones industrial average ended the day 21 points lower, or 0.1 percent, at 15,499.54.

The Nasdaq composite gained 9.90 points, or 0.7 percent, to 3,626.37. The index fell just five times during the month and is at its highest level in more than a decade.

On Wednesday, the Fed reaffirmed its commitment to support the economy in a statement released after the end of a twoday meeting.

The central bank dropped hints that it might need to maintain its stimulus, and slightly downgraded its assessment of U.S. economic growth from “moderate” to “modest.”

Given the market’s big gains in July, stocks may struggle to climb further in the coming months, said Phil Orlando, chief equity market strategist at Federated Investors.

“I would not be the least bit surprised to see some modest consolidation,” said Orlando.