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U.S. stocks rally amid Fed statement, earnings reports

Xinhua, February 2, 2017 Adjust font size:

U.S. stocks rebounded Wednesday, as investors digested the Federal Reserve's decision to keep interest rates unchanged amid earnings reports.

The Dow Jones Industrial Average rose 26.85 points, or 0.14 percent, to 19,890.94. The S&P 500 edged up 0.68 point, or 0.03 percent, to 2,279.55. The Nasdaq Composite Index added 27.86 points, or 0.50 percent, to 5,642.65.

In a statement released Wednesday afternoon, the U.S. central bank painted a relatively upbeat picture for the country's economy. "Labor market continued to strengthen and ... economic activity has continued to expand at a moderate pace," said the statement.

The Fed also acknowledged the improved consumer and business sentiment following the election of Donald Trump as the U.S. President, but offered no hint on when it might move.

"The lack of surprises in today' s Federal Open Market Committee's (FOMC) statement suggests the Fed is in no hurry to raise rates," said Chris Low, chief economist at FTN Financial, in a note.

"It would make sense for the Fed to hike in March if their first priority were to raise rates three times, as suggested by the December dot plot. But the data feeding the Fed' s policy guides does not yet support a hike, nor, apparently, does it support a strong signal concerning the next meeting," he added.

Analysts believed that the upbeat economic assessment suggested the central bank should be on track to raise interest rates in the future.

The Fed raised the benchmark interest rate by 25 basis points on December, the first and only time in 2016, and indicated a faster rate hike pace in 2017.

In corporate news, after Tuesday's closing bell, Apple announced financial results for its fiscal 2017 first quarter ending Dec. 31, 2016. The tech giant posted all-time record quarterly revenue of 78.4 billion U.S. dollars and all-time record quarterly earnings per diluted share of 3.36 dollars.

The company's shares surged 6.13 percent to 128.79 dollars apiece Wednesday following the release of its better-than-expected quarterly results.

On the economic front, U.S. private sector employment increased by 246,000 jobs from December 2016 to January 2017, well above the market consensus of 168,000, said the January ADP National Employment Report Wednesday.

The January purchasing managers' index (PMI) came in at 56 percent, an increase of 1.5 percentage points from the seasonally adjusted December reading of 54.5 percent, according to the Institute for Supply Management (ISM) Wednesday. Enditem