By Stephen Culp
NEW YORK (Reuters) - Federal Reserve Chair Jerome Powell boosted U.S. stock markets on Wednesday when he said the policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy economy, comments that many took as signalling the Fed's three-year tightening cycle is drawing to a close.
The S&P 500 and Dow posted their biggest percentage gains in eight months, while the Nasdaq saw its largest advance in just over a month following Powell's speech to the Economic Club of New York.
Powell said that while "there was a great deal to like" about U.S. prospects, "our gradual pace of raising interest rates has been an exercise in balancing risks."
Earlier in the day, in its first-ever financial stability report, the Fed cautioned that trade tensions, Brexit, and troubled emerging markets could rock a U.S. financial system where asset prices are "elevated."
"(Powell is) now acknowledging he's close to neutral, which suggests maybe not quite as many rate hikes in the future as investors believed," said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago. "It's certainly a change of language and welcome news to investors."
The U.S. Commerce Department affirmed that U.S. GDP
The Dow Jones Industrial Average <.DJI> rose 617.7 points, or 2.5 percent, to 25,366.43, the S&P 500 <.SPX> gained 61.61 points, or 2.30 percent, to 2,743.78 and the Nasdaq Composite <.IXIC> added 208.89 points, or 2.95 percent, to 7,291.59.
Of the 11 major sectors in the S&P 500, all but utilities <.SPLRCU> were positive. Technology <.SPLRCT> and consumer discretionary <.SPLRCD> were the biggest percentage gainers, each up more than 3 percent.
The S&P 500 Automobile & Components index <.SPLRCAU> was up 1.4 percent after President Donald Trump said he was studying new auto tariffs in the wake of General Motors Co's
Health insurer Humana Inc
Among losers, Tiffany & Co
Advancing issues outnumbered declining ones on the NYSE by a 3.95-to-1 ratio; on Nasdaq, a 3.58-to-1 ratio favoured advancers.
The S&P 500 posted 17 new 52-week highs and six new lows; the Nasdaq Composite recorded 37 new highs and 129 new lows.
Volume on U.S. exchanges was 8.04 billion shares, compared with the 7.82 billion-share average over the last 20 trading days.
(Reporting by Stephen Culp; additional reporting by Noel Randewich and Sinead Carew; editing by Jonathan Oatis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Nov 29, 2018 05:05:28 IST