Wall Street up as Fed raises rates, flags no changes to path

US stocks were near session highs in afternoon trading on Wednesday after the Federal Reserve raised interest rates for the second time in three months, as expected. The Fed, which raised its target rate by 25 basis points to 0.75 to 1.00 percent, did not however flag any plan to accelerate the pace of monetary tightening, a concern that had lingered among some market participants.
Markets were expecting the Fed's decision and traders had priced in more than a 90 percent chance of a quarter-point rate increase, according to federal funds futures.
"The concern heading into this meeting was that the Fed would show more urgency in increasing interest rates beyond three rate hikes. The statement and the forecast ... imply that they're staying the course," said Frances Donald, senior economist at Manulife Asset Management in Toronto.
"The additional risk of moving more hawkishly doesn't seem to be present here."
The Dow Jones Industrial Average rose 124.5 points, or 0.6 percent, to 20,961.87, the S&P 500 gained 22.5 points, or 0.95 percent, to 2,387.95 and the Nasdaq Composite added 50.81 points, or 0.87 percent, to 5,907.63.
Financials on the S&P 500 were the worst-performing sector while real estate, up 2.2 percent, was on track to post its largest daily gain since branching out as the 11th S&P sector last September.
US retail sales recorded their smallest gain in six months in February, setting US gross domestic product on track to grow at a 0.8 percent annualized pace in the first quarter, according to the Atlanta Fed's latest forecast.
Energy stocks boosted the S&P 500 as oil prices rose for the first time in more than a week on a surprise drawdown in US crude inventories. US crude gained 2.4 percent to $48.84 per barrel and Brent added 1.8 percent to $51.85.
Exxon shares rose 1.2 percent and Chevron added 1.4 percent.
Apple was up 1.2 percent at $140.70 after RBC raised its price target on the stock.
Twitter was down 1.7 percent at $15.07 after a number of prominent accounts on the microblogging website were hacked.
Advancing issues outnumbered declining ones on the NYSE by a 7.91-to-1 ratio; on Nasdaq, a 2.68-to-1 ratio favored advancers. The S&P 500 posted 74 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 121 new highs and 41 new lows.