NEW YORK (Reuters) - U.S. stocks soared on Wednesday, with major indexes posting their biggest one-day jumps of 2014 after the Federal Reserve reassured investors that its first interest rate hike would not come until it deemed the economy could withstand it.
The Fed has said that it would not raise rates for a"considerable time," and in the minutes from its Sept. 16-17 meeting the U.S. central bank expressed concern that this could be interpreted "as a commitment" rather than being based on data that pointed to an economy that could grow without Fed stimulus.
"Data dependency is what the Fed is trying to beat into the skull of Mr. Market, and the labor market is still too squishy for the Fed to be raising rates anytime soon," said Jim O'Donnell, chief investment officer at Forward in San Francisco, which has US$5 billion in assets under management.
The Dow Jones industrial average rose 274.83 points, or 1.64 per cent, to 16,994.22, the S&P 500 gained 33.79 points, or 1.75 per cent, to 1,968.89 and the Nasdaq Composite added 83.39 points, or 1.9 per cent, to 4,468.59.
The day marked the biggest one-day advance for both the S&P and Nasdaq since Oct. 10, 2013, when hopes grew for a deal to end a budget stalemate in Washington. It was the best day for the Dow since December.
Volume was heavy, with about 8.4 billion shares traded on all U.S. platforms, according to BATS exchange data, well over the month-to-date average of 7.19 billion.