By Amy Caren Daniel
(Reuters) - U.S. stock indexes rallied more than 1.5 percent on Wednesday after Federal Reserve Chairman Jerome Powell said the policy rate was 'just below' neutral, easing worries of a faster pace of interest rate hikes next year.
The Fed's gradual interest-rate hikes are meant to balance risks as it tries to keep the economy on track, Powell said, but offered few clues on how much longer the U.S. central bank would raise interest rates in the face of a global slowdown and market volatility at home.
"He's now acknowledging he's close to neutral, which suggests maybe not quite as many rate hikes in the future as investors believed. It's certainly a change of language and welcome news to investors," said Jack Ablin, chief investment officer at cresset wealth advisors in Chicago.
"It makes the value of risk aversion less attractive, so it makes risk taking, such as stock investments, more attractive."
Ten of the 11 major S&P sectors were higher, with the technology sector's <.SPLRCT> 2.45 percent rise leading the gains.
Yields on two-year Treasury
Financials <.SPSY> rose 1.2 percent, boosted by gains in U.S. lenders including JPMorgan Chase & Co
Earlier in the day, the central bank, in a first-ever report devoted to financial stability, said trade tensions, Brexit discussions, trouble in China and emerging markets could rock a U.S. financial system where asset prices are "elevated" and business credit quality may be "deteriorating."
At 12:49 a.m. EDT the Dow Jones Industrial Average <.DJI> was up 477.47 points, or 1.93 percent, at 25,226.20, the S&P 500 <.SPX> was up 42.76 points, or 1.59 percent, at 2,724.93 and the Nasdaq Composite <.IXIC> was up 142.77 points, or 2.02 percent, at 7,225.47.
Markets also took heart from White House economic adviser Larry Kudlow's comments on Tuesday that opened the possibility that the United States and China would reach a trade deal at the upcoming G20 Summit.
Advancing issues outnumbered decliners by a 3.45-to-1 ratio on the and by a 2.96-to-1 ratio on the Nasdaq
The S&P index recorded 13 new 52-week highs and five new lows, while the Nasdaq recorded 25 new highs and 107 new lows.
(Reporting by Amy Caren Daniel in Bengaluru and Sinead Carew; Editing by Arun Koyyur)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
Updated Date: Nov 29, 2018 01:05:22 IST