Wall Street soars after Fed interest rate statement

Wall Street surged on Wednesday afternoon trading after the Federal Reserve delivered an upbeat assessment of the U.S. economy, and added that it will be patient with approaching an interest rate increase, a move that investors welcomed.

Stocks added to sharp gains after the Fed’s statement and headed for the first gain in four sessions.

The Federal Reserve gave an indication that it was still on track to raise benchmark interest rates somewhere next year. Also, the Federal Reserve entered the meeting backed by a strong backdrop of domestic economic growth.

The Fed said it will be patient with approaching the eventual interest rate increase, and also upped its assessment of the economy and in particular the labor market.

Earlier on Wednesday, data showed U.S. consumer prices fell at fastest pace in nearly 6 years in November in the wake of the slump in oil prices.

Lingering low inflation allows more room for Fed policy makers to be patient in normalizing policy.

Equity markets will benefit from the support of the Federal Reserve for the short term, while on the longer term, the improving economy is highly likely to improve earnings growth, which will keep stocks supported.

-The Dow Jones Industrial Average gained 1.69% or 288.00 points to 17356.87

-The S&P 500 Index gained 2.03% or 40.14 points to 2012.88

All of the S&P’s sectors edged higher, with energy leading the gains with a wide margin.

-The NASDAQ Composite Index gained 2.12% or 96.48 points to 4644.31 points.

Shares of Herzfeld Caribbean Basin Fund struck a seven-year higher after U.S. President Obama announced a shock move to normalize relations between Cuba and the U.S.

Shares of the fund rose 23.4%.