Wall St extends gains following Fed minutes

NEW YORK (REUTERS) - US stocks jumped on Wednesday, with the three major indexes hitting session highs, after minutes from the Federal Reserve's latest policy meeting showed a more supportive central bank than previously expected.

The Dow and the Nasdaq rose more than 1 per cent with internet and biotech stocks leading the gains. Facebook shares jumped 5.6 per cent to US$61.45 (S$71.65).

Fed policymakers were unanimous in wanting to ditch the thresholds they had been using to telegraph a policy tightening, according to minutes of a meeting last month that shed little new light on what might prompt an eventual interest-rate rise.

"People are taking solace in the idea that the Fed may be more accommodative than previously thought, for longer than previously thought," said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut.

"That's giving the lift to stocks." Alcoa Inc gained 3.6 per cent to US$12.98 as the best performer on the S&P 500 after earnings came in ahead of analysts' expectations.

S&P 500 companies' first-quarter earnings are projected to have increased just 1 per cent from a year ago, Thomson Reuters data showed, down sharply from the start of the year, when profit growth was estimated at 6.5 per cent.

U.S. stocks had advanced in the prior session to snap a three-day losing streak as investors bought beaten-down social media and Internet shares.

Despite the three-day selloff, the benchmark S&P 500 index managed to hold above its 50-day moving average around 1,840, a key support level. The index has successfully defended the 1,840 area several times over the past month.

The Nasdaq biotechnology index was up 3.6 per cent and the Global X social media index was up 2.9 per cent at US$19.02.

"In recent days, in general, large caps outperformed small caps, and low-beta companies outperformed those with higher betas," said US Bank Wealth Management's equity research team in a note to clients. Low beta refers to less volatile stocks that also offer less potential return.

"While investor sentiment remains fragile, we continue to maintain a constructive outlook for equities, believing that the path of least resistance is still up." The Dow Jones industrial average rose 157.29 points or 0.97 per cent, to 16,413.43, the S&P 500 gained 16.76 points or 0.9 per cent, to 1,868.72 and the Nasdaq Composite added 56.685 points or 1.38 per cent, to 4,169.671.

Earnings season gets under way this week, with results due from retailer Bed, Bath & Beyond after the close, while financials JPMorgan Chase & Co and Wells Fargo & Co close out the week with results on Friday.

Investors will be looking at the impact of harsh winter weather on first-quarter earnings, and signs of optimism for the second-quarter.

US wholesale inventories rose at a slower 0.5 per cent pace in February, in line with expectations, after a revised 0.8 per cent gain in January, which could support views that restocking did not help the economy in the first quarter.