Wall Street adds to gains after Fed releases October minutes

By Sinead Carew

(Reuters) - The S&P 500 hit a session high on Wednesday after minutes from the Federal Reserve October meeting showed a solid core of officials rallied behind a possible December rate hike.

Central bankers at the October policy meeting also debated evidence the U.S. economy's long-term potential may have permanently shifted lower.

"I think the market is ready and comfortable for an increasing Fed funds rate," said Alan Rechtschaffen, portfolio manager at UBS Wealth Management Americas in New York. "We just have to turn this aircraft carrier around, get out of this zombie-like economy which is being fed on an elixir of low interest rates and get to a process of normalization."

The Dow Jones industrial average rose 175.24 points, or 1 percent, to 17,664.74, the S&P 500 gained 22.28 points, or 1.09 percent, to 2,072.72 and the Nasdaq Composite added 62.01 points, or 1.24 percent, to 5,048.02.

Investors widely expect the central bank to raise rates in December, but remain uncertain about the magnitude of the increase and the timing of further hikes.

"Until they start to get some clarity on that, you'll just see the 'little bit up, little bit down' type of trading range that we're in right now," said Dan Farley, regional investment strategist at U.S. Bank Wealth Management in Minneapolis.

Apple's shares were up 2.6 percent at $116.65 after Goldman Sachs added the iPhone maker to its "conviction buy" list, saying it sees potential for the stock gaining as much as 43 percent from current levels.

The stock provided the biggest boost to the three major indexes.

Investors, however, remained cautious due to increased global security concerns after last week's attacks in Paris.

"All eyes are on the Fed, while geopolitical concerns remain on the minds of the investors," said Peter Cardillo, chief market economist at First Standard Financial in New York.

Data on Wednesday showed U.S. housing starts fell to a seven-month low, but a surge in building permits suggested the housing market remained on solid ground.

Eight out of 10 S&P sectors were higher after the minutes, led by a 1.35 percent rise in the healthcare sector <.SPXHC>.

Qualcomm and Target were the biggest drags on the S&P. Qualcomm fell 9 percent after a South Korean regulator alleged it violated competition laws.

Target fell 4.5 percent after it warned it will not meet its fiscal-year forecast for online sales growth.

Advancing issues outnumbered declining ones on the NYSE by 2,157 to 843, for a 2.56-to-1 ratio on the upside; on the Nasdaq, 1,881 issues rose and 896 fell for a 2.10-to-1 ratio favoring advancers.

The S&P 500 posted 16 new 52-week highs and 7 new lows; the Nasdaq recorded 43 new highs and 99 new lows.

(Additional reporting by Chuck Mikolajczak in New York, Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty and Nick Zieminski)