US STOCKS-U.S. stocks rise after Powell says it is too soon to talk taper
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Updates to reflect S&P 500 and Nasdaq gaining
By Noel Randewich
March 17 (Reuters) - Wall Street rose on Wednesday after the Fed predicted a fast economic recovery from the coronavirus pandemic and said it would maintain its interest rate at close to zero.
The Dow Jones Industrial Average hit an intra-day record high and the S&P 500 was on track to close at a record high.
In its statement following its two-day policy meeting, the Federal Reserve projected a rapid jump in U.S. economic growth and inflation this year as the COVID-19 crisis winds down, and repeated its pledge to keep its target interest rate near zero for years to come. nL1N2LE1D0
Wall Street extended gains after Fed Chair Jerome Powell said during a news conference that it is too early to discuss tapering off measures to support the struggling economy.
"The Fed statement today was more optimistic than some expected, they raised their outlook for both economic growth and the labor market. The market’s view of the statement is that it was fairly optimistic," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
A $1.9 trillion spending stimulus and the rollout of vaccines have fueled a rotation into so-called value stocks that are viewed as likely to outperform as the economy recovers from the coronavirus pandemic.
At the same time, worries that the stimulus could overheat the economy and lead to higher inflation rates have triggered a strong rise in long-duration Treasury yields and made technology and other growth stocks less attractive.
Following the Fed's statement, the yield on 10-year Treasuries US10YT=RR ticked lower to 1.6374%.
The Dow Jones Industrial Average .DJI was up 0.57% at 33,013.85 points, while the S&P 500 .SPX gained 0.34% to 3,976.08.
The Nasdaq Composite .IXIC added 0.46% to 13,533.43.
Amazon.com Inc AMZN.O rose 2% and gave the greatest lift to the S&P 500, while Apple Inc's AAPL.O 0.6% decline weighed the index down more than any other stock.
Just over half of the S&P 500 sector indexes were higher, with industrials .SPLRCI and consumer discretionary .SPNY each up less than 1% and among the strongest performers.
The S&P 500 and the Dow on Monday reached all-time closing highs while the Nasdaq has recovered more than half of its losses following a selloff in late February and early March.
Fast-food retailer McDonald's Corp MCD.N gained 2% after Deutsche Bank raised its target price on the stock and also upgraded its recommendation to "buy" from "hold."
Advancing issues outnumbered declining ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored advancers.
The S&P 500 posted 36 new 52-week highs and no new lows; the Nasdaq Composite recorded 99 new highs and 16 new lows.
(Reporting by Noel Randewich in Oakland, Calif.
Additional reporting by Shashank Nayar and Medha Singh in Bengaluru
Editing by Matthew Lewis)
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