Wall St jumps as Fed statement relieves worries

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks climbed on Wednesday, reversing course as the Federal Reserve moved a step closer to its much-anticipated first rate hike since 2006 by removing "patient" from its language.

While the Fed's statement following a two-day meeting put a June rate increase on the table, it also allowed the U.S. central bank flexibility to move later in the year, stressing that any decision would depend on incoming data.

Markets bet on a September hike after the Fed downgraded the expected pace of growth and inflation.

"Some may have been fearing a more hawkish Fed, and that explains the rally we're seeing right now," said John Carey, portfolio manager at Pioneer Investment Management in Boston.

Energy shares surged as crude oil rallied following the Fed statement and the dollar fell. The S&P energy index <.SPNY> was up 2.5 percent, leading gains in the S&P 500.

At 2:24 p.m., the Dow Jones industrial average rose 135.85 points, or 0.76 percent, to 17,984.93, the S&P 500 gained 16.71 points, or 0.81 percent, to 2,090.99 and the Nasdaq Composite added 28.10 points, or 0.57 percent, to 4,965.54.

Oracle rose 2.6 percent to $43.97 a day after it posted flat third-quarter revenue and slightly lower profit. However, it raised its quarterly dividend 25 percent to 15 cents a share.

(Editing by Bernadette Baum and Cynthia Osterman)