London close: Stocks rally on US data as eyes turn to Fed

After a cautious start, the FTSE 100 rallied strongly in afternoon trade following some strong economic data from the US, though markets pulled back slightly from their intraday highs by the close as investors awaited a key policy announcement from the Federal Reserve.London's benchmark index finished the day up 50 points at 6,621.Traders were also likely looking ahead to tomorrow, with decisions from the Bank of England and European Central Bank also due.Economic data lifts sentiment in Eurozone and USMarkets opened broadly flat early on but pushed into positive territory by mid-morning after some upbeat news about the labour market in the Eurozone: some 24,000 fewer people were without a job in the single-currency region in June, the first decline in unemployment since April 2011. The jobless rate was unchanged however at 12.1%. Gains for equities were then extended after the release of growth figures from the States this afternoon which showed that the economy grew at an annualised rate of 1.7% in the second quarter, a sharp acceleration from the downwardly-revised 1.1% growth seen in the first quarter. The consensus forecast was for an expansion of just 1.0%.There were also revisions to previous years which showed that the US grew at a 2.8% rate in 2012, better than the initial 2.2% estimate.Meanwhile, the ADP employment report - normally viewed as a rough guide to the official non-farm payrolls data due out on Friday - showed that private-sector employers added a total of 200,000 jobs in July, slightly higher than the previous month's 198,000 gain and much better than the consensus estimate of 180,000.All eyes on the FedThe outcome of the two-day Federal Open Market Committee (FOMC) meeting is due out this evening and will be closely watched the world over, even though policymakers are widely expected to refrain from scaling back stimulus until at least September.However, markets will be on the look-out for any hints of a possible timeframe on the impending withdrawal of quantitative easing. With Fed Chairman Ben Bernanke reiterating that a 'tapering' of stimulus relies heavily on incoming economic data, traders are likely to remain on edge until the all-important employment report from the Bureau of Labor Statistics on Friday."We do not expect the Committee to have sprung any surprises, such as announcing an imminent scaling back of its asset purchases. However, we continue to think it will start this process at its next meeting in September," said analysts at Capital Economics this afternoon."Our expectation is that the Fed will tread very cautiously in phasing out its monetary stimulus and we see monthly purchases grinding to a halt only by the middle of next year."FTSE 100: Investors toast solid annual results from DiageoDiageo, the beverages company behind the Guinness, Baileys and Smirnoff brands, was a high riser on Wednesday after delivering a solid 5.0% increase in full-year net sales, driven by strength in the North American and spirits markets. Drinks company SABMiller was also making gains.Centrica, the energy company which owns British Gas, also rose after reporting a "robust" financial performance in the six months to June 30th, with revenue up 14% at £13.7bn after customers used more gas to stay warm during an unusually cold winter. Utilities peer National Grid was also higher.Tobacco giant British American Tobacco also impressed after being able to grow organic sales by 4.0% and operating profit by 6.0% in spite a fall in volumes in the first half. Sector peer Imperial was also in demand.South America-focused mining group Antofagasta gained despite seeing copper output fall from the first to the second quarter, as it said it was still on track to hit its full-year target of 700,000 tonnes, more or less in line with last year.Oil explorer Tullow was higher after reporting a 15% jump in first-half revenue to $1.3bn on the back of an increase in production. Sector peer BP meanwhile was rebounding after investors yesterday gave a cool reaction to its second-quarter results.In contrast, banking group Barclays was extending losses made the day before after it revealed plans for a £5.8bn rights issue and reported a drop in profits in the first half. Utilities firm SSE however was the standout faller after going ex-dividend.FTSE 250: Moneysupermarket.com plummets after H1 resultsMoneysupermarket.com was a heavy faller today after the price comparison website said sales growth had ground to a halt in July after a 10% increase in the first half. The share price was also dampened by the news that CFO Paul Doughty is to step down. Canaccord Genuity didn't help matters by downgrading its rating for the stock from 'buy' to 'hold'. F&C Asset Management surged after the investment firm reported better-than-expected interim results with net inflows of £432m, compared to outflows of £742m.Rightmove rose following a rise in underlying operating profit for the first half of the year, boosted by an improving housing market and investment in its own technology.FTSE 100 - RisersDiageo (DGE) 2,054.00p +3.24%SABMiller (SAB) 3,220.50p +2.58%National Grid (NG.) 786.50p +2.21%Imperial Tobacco Group (IMT) 2,206.00p +1.80%Associated British Foods (ABF) 1,944.00p +1.78%Melrose Industries (MRO) 282.00p +1.77%Kingfisher (KGF) 397.50p +1.66%Pearson (PSON) 1,350.00p +1.58%HSBC Holdings (HSBA) 747.80p +1.58%Hargreaves Lansdown (HL.) 980.50p +1.50%FTSE 100 - FallersSSE (SSE) 1,575.00p -3.85%Fresnillo (FRES) 1,029.00p -1.81%Barclays (BARC) 287.90p -1.17%Vedanta Resources (VED) 1,163.00p -1.11%Randgold Resources Ltd. (RRS) 4,770.00p -1.10%RSA Insurance Group (RSA) 125.00p -1.03%Rolls-Royce Holdings (RR.) 1,175.00p -0.93%Admiral Group (ADM) 1,403.00p -0.92%Sage Group (SGE) 350.50p -0.82%Anglo American (AAL) 1,408.00p -0.81%FTSE 250 - RisersF&C Asset Management (FCAM) 100.00p +5.82%Rank Group (RNK) 160.50p +5.59%Rightmove (RMV) 2,431.00p +5.24%Oxford Instruments (OXIG) 1,425.00p +4.78%St James's Place (STJ) 618.00p +4.13%Brewin Dolphin Holdings (BRW) 253.70p +3.85%SEGRO (SGRO) 310.80p +3.60%Tullett Prebon (TLPR) 332.90p +3.55%Perform Group (PER) 502.00p +3.51%Essentra (ESNT) 774.00p +3.34%FTSE 250 - FallersMoneysupermarket.com Group (MONY) 181.00p -14.70%Evraz (EVR) 93.85p -5.63%Dignity (DTY) 1,475.00p -4.03%Salamander Energy (SMDR) 119.40p -3.48%Menzies(John) (MNZS) 737.50p -3.09%Telecity Group (TCY) 889.00p -2.95%Kazakhmys (KAZ) 260.30p -2.76%Bank of Georgia Holdings (BGEO) 1,780.00p -2.73%Barratt Developments (BDEV) 326.00p -2.69%IP Group (IPO) 145.10p -2.62%BC