Wall St. up as Fed raises rates but stays course

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U.S. stocks rose sharply 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, or a quarter of a percentage point, to between 0.75 and 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."People were thinking the Fed might be more aggressive, so the fact that they weren't means more complacency and a continued course," said Eric Schoenstein, co-portfolio manager of the Jensen Quality Growth Fund in Portland, Oregon."The statement was not as hawkish as it might have been."

The Dow Jones Industrial Average . DJI rose 112.73 points, or 0.54 percent, to close at 20,950.1, the S&P 500 . SPX gained 19.81 points, or 0.84 percent, to 2,385.26 and the Nasdaq Composite . IXIC added 43.23 points, or 0.74 percent, to 5,900.05. The Russell 2000 index of small-cap stocks rose 1.5 percent, while financials on the S&P 500 . SPSY were the worst-performing sector. U.S. retail sales recorded their smallest gain in six months in February, setting U.S. 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 U.S. crude inventories. U.S. crude CLc1 gained 2.7 percent to $49.01 per barrel and Brent LCOc1 added 2.1 percent to $51.99. Exxon shares (XOM. N) rose 1.2 percent and Chevron (CVX. N) added 1.4 percent. Apple (AAPL. O) was up 1.1 percent at $140.46 after RBC raised its price target on the stock.

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