Wall Street rallies after Fed statement; S&P has best day this year

December 17
5:32 PM 2014

The S&P 500 scored its best day since October 2013 on Wednesday as the Federal Reserve gave an upbeat assessment of the economy and said it would take a patient approach toward lifting interest rates.

The rally, which followed a three-day losing streak, was also driven by a 4.2 percent gain in the S&P energy index .SPNY.

Following a two-day meeting, the U.S. central bank gave a strong signal that it was on track to raise interest rates sometime next year. The Fed statement came against a backdrop of solid domestic economic growth but trouble overseas.

"This is the market saying, 'Ah, I get it,' the Fed does not want to be in the business of disruption, this is a steady monetary policy and the Fed will continue to be supportive of asset prices," said Scott Clemons, chief investment strategist at Brown Brothers Harriman Private Banking in New York.

Also supporting stocks, Fed Chair Janet Yellen it was not a major concern that some banksmay be leveraged and exposed to oil price moves. U.S. and Brent oil are down roughly 50 percent since June.

The Dow Jones industrial average .DJI rose 288 points, or 1.69 percent, to 17,356.87, theS&P 500 .SPX gained 40.15 points, or 2.04 percent, to 2,012.89 and the Nasdaq Composite.IXIC added 96.48 points, or 2.12 percent, to 4,644.31.

All 10 S&P sector ended higher.

Shares of Exxon Mobil (XOM.N) jumped 3 percent to $89.02. Energy shares have which has fallen sharply with the recent heavy selloff in oil prices.

Earlier in the day, data showed U.S. consumer prices recorded their biggest drop in nearly six years in November as gasoline prices tumbled.

Shares of the Herzfeld Caribbean Basin Fund, a closed-end mutual fund listed on Nasdaq (CUBA.O), hit a seven-year high as President Barack Obama announced a move to normalize relations between the United States and Cuba.

The fund, which holds stocks and assets that fund manager Thomas Herzfeld believes would benefit from an eventual end to the U.S. economic embargo against Cuba, rose 28.9 percent to $8.78.

About 9.4 billion shares changed hands on U.S. exchanges, above the 7.3 billion average this month, according to BATS Global Markets.

NYSE advancing issues outnumbered decliners 2,777 to 353, for a 7.87-to-1 ratio; on theNasdaq, 2,214 issues rose and 545 fell for a 4.06-to-1 ratio.

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