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Wall Street surges after Fed raises rates

The US stock market rose 0.8% overnight after Federal Reserve lifted interest rates by 0.25% but insisted further rises would be gradual.

Wall Street surges after Fed raises rates

Wall Street surged on Wednesday after the Federal Reserve raised interest rates for the third time since December 2015 but did not flag any plan to accelerate the pace of monetary tightening.

The Dow Jones Industrial Average rose 113 points, or 0.54%, to 20,950, the S&P 500 gained 20 points, or 0.84%, to 2,385 and the Nasdaq Composite added 43 points, or 0.74%, to 5,900.

The Fed increased its benchmark interest rate by 25 basis points to a range of between 0.75-1%, noting that headline inflation is “moving close” to its 2% target. Investors had widely expected the central bank's rate increase, which was spurred by steady economic growth, strong job gains and confidence that inflation is rising to the Fed's target.

But the Fed's policy-setting committee did not flag any plan to accelerate the pace of monetary tightening. Further rate increases would only be "gradual," the Fed said in its policy statement, with officials sticking to their outlook for two more rate hikes this year and three more in 2018.

Data released on Wednesday showed the Consumer Price Index rose 0.1% in February, the smallest increase since last summer. Separately, retail sales rose 0.1% in February.

Energy shares and defensive sectors such as utilities and real estate led gains. Oil prices rose after six sessions of declines, with the greenback-denominated commodity extending gains as the dollar weakened.

In company news, Southwestern Energy Co. climbed 5.8% after Citigroup upgraded the company to buy from neutral.

Twitter Inc. dropped 1.9% after at least dozens of prominent accounts were hacked early Wednesday.

AT&T Inc. rose 1.2% after the European Commission approved the telecom company’s $85 billion acquisition of Time Warner Inc. Shares of Time Warner were 0.4% higher.

Shares of Golden Ocean Group Ltd. rallied 10% after the shipping company said it had successfully completed its $60 million share offering.

MSCI Inc. added 3.1% after it denied reports that it received, and rejected, a buyout bid by S&P Global Inc. deeming it too low.

In Asia, equities followed US stocks higher on Thursday, after as the Fed raised interest rates without accelerating its timeline for future tightening.

In Japan, the Nikkei Stock Average 225 declined 0.18%, while South Korea’s Kospi Index added 0.58%. In Australia, the ASX All Ordinaries Index fell 0.02%. In Hong Kong, the Hang Seng Index rose 1.0%, while China’s Shanghai Composite Index rose 0.64%.

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