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US: Stocks rally on earnings, dovish Federal Reserve
[NEW YORK] Wall Street stocks rallied Wednesday following a dovish Federal Reserve announcement and earnings from Apple and Boeing that bested expectations.
The Dow Jones Industrial Average finished at 25,014.86, a gain of 1.8 per cent.
The broad-based S&P 500 rose 1.6 per cent to close at 2,681.05, while the tech-rich Nasdaq Composite Index advanced 2.2 per cent to 7,183.08.
The Fed kept interest rates unchanged and definitively signaled a cautious approach to further interest rate hikes, with Fed Chair Jerome Powell saying "the case for raising rates has weakened somewhat."
The Fed also said it could adjust the pace of reduction of its massive securities holdings, after markets became concerned that the current process was too rigid.
"What investors most like is that they got more than they expected" from the Fed, said Art Hogan, chief market strategist at National.
The Fed's statement and news conference offered "reassurance that investors don't need to worry about monetary policy being reckless in regards to what's going on in the global economy," Mr Hogan said.
The gains following the Fed meeting augmented the advance in stocks already underway.
Apple surged 6.8 per cent after reporting quarterly profit of US$20 billion, a dip of less than one percent compared with the year-ago period. Revenue growth in music, movies, apps and other services offset slumping iPhone sales.
The results were better than feared after Apple earlier this month warned of a hit to revenues from a slowing Chinese economy.
Fellow Dow member Boeing jumped 6.3 per cent after reporting better-than-expected fourth-quarter results and projecting a big jump in commercial aircraft deliveries.
Besides earnings, investor sentiment was boosted by an ADP employment report that showed the private sector added 213,000 jobs in January, far stronger than the 170,000 economists were expecting.