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US STOCKS-U.S. stocks end higher after Powell projects stronger economy

US STOCKS-U.S. stocks end higher after Powell projects stronger economy

· 03/17/2021 16:00
US STOCKS-U.S. stocks end higher after Powell projects stronger economy

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McDonald's rises as DB raises rating, price target

Amazon buoys S&P 500

Industrials, consumer discretionary among leaders

Updates with close of trading

By Noel Randewich

- Wall Street ended higher 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.

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%.

Unofficially, the Dow Jones Industrial Average .DJI rose 193.24 points, or 0.59%, to 33,019.19, the S&P 500 .SPX gained 11.58 points, or 0.29%, to 3,974.29 and the Nasdaq Composite .IXIC added 53.64 points, or 0.4%, to 13,525.20.

Amazon.com Inc AMZN.O rose, giving the greatest lift to the S&P 500.

Most of the S&P 500 sector indexes rose, with industrials .SPLRCI and consumer discretionary .SPNY among the strongest performers.

Fast-food retailer McDonald's Corp MCD.N gained after Deutsche Bank raised its target price on the stock and also upgraded its recommendation to "buy" from "hold."

(Reporting by Noel Randewich in Oakland, Calif.
Additional reporting by Shashank Nayar and Medha Singh in Bengaluru
Editing by Matthew Lewis)

+1 (415) 677 2542, Twitter: @randewich))