Stocks jump after Fed promises 'patient' approach
NEW YORK - U.S. stocks rose sharply Wednesday afternoon after the Federal Reserved said the U.S. economy was improving and that it would be "patient" in determining when to raise rates. Energy stocks jumped after the price of oil recovered some of its recent losses.
KEEPING SCORE: The Dow Jones industrial average gained 256 points, or 1.5 percent, to 17,326 as of 2:24 p.m. Eastern. It was up as much as 303 points moments after the Fed's statement was released at 2:00 p.m.
The Standard & Poor's 500 index rose 34 points, or 1.8 percent, to 2,007. The Nasdaq composite climbed 71 points, or 1.5 percent, to 4,617.
The Dow is coming off of three days of losses as investors worry about a plunge in Russia's ruble and a sharp drop in the price of crude oil. The index lost 528 points in the first three days of this week.
FED MEETING: The Federal Reserve indicated it was moving closer to raising interest rates from record-low levels because the U.S. economy and job market are becoming stronger. The central bank also promised to take a "patient" approach in doing so, reassuring investors that it wouldn't tighten credit too soon and endanger the U.S. economic recovery.
ANALYST RESPONSE: The market is saying that "the Fed is not going to surprise us with anything, or rush in to tighten next year," said Sean Lynch, managing director of global equity strategy at Wells Fargo Private Bank. Increased confidence in the economy and subdued inflation is "a good backdrop" for stocks, Lynch said.
ENERGY RALLY: Energy stocks led gains for the S&P 500 index as the price of oil recovered some of its recent losses. Stocks in the sector jumped 4.4 percent, reducing their losses in the last three months to 18 percent. Nabors Industries was the biggest gainer in the S&P 500 index, surging $1.30, or 12.32 percent, to $11.80.
OIL: U.S. crude turned higher in afternoon trading. Oil rose $1.21, or 2.2 percent, to $57.14 a barrel on the New York Mercantile Exchange.
RUSSIA FOCUS: Russia remained in focus on concerns about the impact of the recent slide in the ruble. The currency has lost more than 50 percent of its value this year. After falling again early Wednesday, the ruble recovered and was 14 percent higher at 60 rubles to the dollar.
The currency recovered some of its losses Wednesday after Russian authorities indicated that they would sell foreign currency to relieve pressure on the ruble. The Russian currency has suffered in the wake of sliding oil prices and sanctions imposed over Russia's involvement in Ukraine's crisis.
EARNING FAIL TO DELIVER: FedEx was one of the biggest losers in early trading after in the shipping company reported earnings that fell short of Wall Street's expectations. The company said a jump in plane maintenance costs blunted gains the company reaped from managing costs, lowering its pension expense and growing its export package revenue. The company's stock dropped $9.21, or 5.3 percent, to $165.07.
EUROPE'S DAY: In Europe, Germany's DAX was 0.2 percent lower while the CAC-40 in France rose 0.5 percent. The FTSE 100 index of leading British shares rose 0.1 percent.
BONDS AND CURRENCIES: U.S. government bond prices fell slightly. The yield on the 10-year Treasury note edged up to 2.11 percent from 2.06 percent late Tuesday. The euro was 0.8 percent lower at $1.2411 and the dollar fell 0.3 percent to 117.62 yen.
METALS: The price of gold edged up 20 cents to $1,194.50 an ounce. Silver rose 18 cents to $15.93 an ounce and copper rose a penny to $2.87 a pound.