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Overnight Markets: US stocks jump as Fed signals fewer rate hikes
The S&P 500 closed at its highest level of the year after the US central bank kept its benchmark short- term interest rates unchanged.
Wall Street gained on Wednesday, with the S&P 500 closing at its highest level of the year, after the US Federal Reserve kept its benchmark short- term interest rates unchanged as widely expected.
The Dow Jones industrial average closed up 74 points, or 0.43%, to 17,326, the S&P 500 had gained 11 points, or 0.56%, to 2,027 and the Nasdaq Composite had added 35 points, or 0.75%, to 4,764.
The Fed indicated moderate US economic growth and "strong job gains" would allow it to tighten policy this year with fresh projections showing policymakers expected two quarter-point increases by the year's end, half the number seen in December.
But the US central bank noted the US continues to face risks from an uncertain global economy.
Eight of the 10 major S&P sectors closed higher. Materials were up the most at 1.74%. Healthcare and financial stocks lagged.
Energy sector rose 1.6% as US oil prices surged almost 6% after major producers firmed up plans to discuss an output freeze and US crude stockpiles grew less than expected. Shares of Peabody Energy Corp. fell 45.4% after the company said in a regulatory filing it may have to seek bankruptcy protection.
Shares of Oracle added 3.8% after the enterprise software company's quarterly profit beat estimates.
LinkedIn fell 4.9% and Gap fell 1.4% after Morgan Stanley downgraded both stocks.
Fossil slid 4.8% after Macquarie cut its rating on the stock to "underperform."
Mallinckrodt dropped 6.4%, continuing its slide for a second day, while fellow specialty drugmaker Endo International recouped some of its losses from Tuesday, jumping 4.1%.
In Asia, shares advanced on Thursday in morning trade, following a surge in Wall street as investors cheered new clarity from the Fed and a rise in oil prices.
Japan's Nikkei 225 index was up 1.28%, after falling the previous two sessions. Across the Korean Strait, the Kospi was 1.17% higher. Hong Kong's Hang Seng index also gained 1.52%.
Chinese markets also traded higher, with the Shanghai composite up 0.64%. Australia's S&P/ASX 200 climbed 0.98%.
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by David Kempton on May 24, 2016 at 17:15