* Fed raises rates as expected; job gains stoke confidence
* Bond yields also fall after Fed decision
* European stock markets also focus on Dutch elections
(Updates with comments, afternoon trading after Fed decision)
By Lewis Krauskopf
NEW YORK, March 15 U.S. stocks pushed higher on
Wednesday, while Treasury yields fell and the dollar weakened,
after the Federal Reserve raised interest rates for the second
time in three months but did not flag any plan to accelerate the
pace of monetary tightening.
The central bank's rate increase was spurred by steady
economic growth, strong job gains and confidence that inflation
is rising to the central bank's target. Investors had widely
expected the rate increase.
But the Fed's policy-setting committee did not flag any plan
to accelerate the pace of monetary tightening. Although
inflation is "close" to the Fed's 2-percent target, it noted
that goal was "symmetric," indicating a possible willingness to
allow prices to rise at a slightly faster pace.
"Lower rates, higher equities and a lower dollar all point
to this being interpreted as more dovish than what was
expected," said Randy Frederick, vice president Of trading and
derivatives for Charles Schwab in Austin, Texas.
The Dow Jones Industrial Average rose 104.46 points,
or 0.5 percent, to 20,941.83, the S&P 500 gained 18.29
points, or 0.77 percent, to 2,383.74 and the Nasdaq Composite
added 40.50 points, or 0.69 percent, to 5,897.32.
Energy shares and defensive sectors such as
utilities and real estate led gains.
MSCI's all-country world stock index climbed
"Markets are recognizing that while the Federal Reserve will
raise interest rates three times this year there is not the risk
that some were afraid of that they would move more aggressively
based on what we have now," said Frances Donald, senior
economist with Manulife Asset Management in Toronto.
The dollar fell 1 percent against a basket of key currencies
and hit a five-week low against the euro.
U.S. two- and three-year yields, which are most vulnerable
to Fed policy, fell from multi-year highs touched during morning
Prices on benchmark 10-year Treasuries rose
24/32 to yield 2.508 percent, from 2.595 percent late on
Oil prices rose after six sessions of declines. U.S. crude
settled up 2.4 percent at $48.86 a barrel, after touching
a three-month low a day earlier. Benchmark Brent settled
up 1.8 percent to $51.81 a barrel.
Before the decision, crude had been lifted by a surprise
drawdown in U.S. crude inventories and data from the
International Energy Agency suggesting OPEC cuts should create a
crude deficit in the first half of 2017.
Earlier, the pan-European STOXX 600 index gained
0.4 percent, helped by energy and basic resource stocks
Europe markets also focused on Dutch elections, where
anti-EU firebrand candidate Geert Wilders is providing the
latest test of anti-establishment and anti-EU sentiment.
(Additional reporting by Ann Saphir, Saqib Ahmed and Sinead
Carew, Editing by Nick Zieminski)