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

The Federal Reserve raised its target rate by 25 basis points to 0.75 to 1.00 per cent

US stocks hit 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 per cent, did not 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 per cent chance of a quarter-point rate increase, according to federal funds futures.

"The angst out there in the market was the Fed was going to come out swinging. There was none of that in the statement," said John Canally, investment strategist and economist at LPL Financial in Boston.

"This might be read as a little less hawkish than the market might have feared."

The Dow Jones Industrial Average was up 86.81 points, or 0.42 per cent, to 20,924.18, the S&P 500 had gained 15.43 points, or 0.65 per cent, to 2,380.88 and the Nasdaq Composite added 33.70 points, or 0.58 per cent, to 5,890.51.

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 per cent annualised pace in the first quarter according to the Atlanta Fed's latest forecast.

Energy sector 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 1.9 per cent to $48.63 per barrel and Brent added 1.3 per cent to $51.60.

Exxon shares rose 0.7 per cent and Chevron added 0.6 per cent.

Apple was up 1.0 per cent at $140.31 after RBC raised its price target on the stock.

Twitter was down 2.9 per cent at $14.88 after a number of prominent accounts on the microblogging website were hacked.

Advancing issues outnumbered declining ones on the NYSE by a 5.45-to-1 ratio; on Nasdaq, a 2.44-to-1 ratio favoured advancers.

The S&P 500 posted 48 new 52-week highs and two new lows; the Nasdaq Composite recorded 108 new highs and 38 new lows.