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Dow gains 127;
Associated Press
Nasdaq up 110NEW YORK -- Stocks held onto early gains today after the Federal Reserve announced its sixth interest-rate increase since last June. Investors snapped up stocks on the hope that the Fed is succeeding in keeping inflation under control, although market analysts warned that rates will continue to rise.
The Fed raised interest rates by a half-percentage point, the steepest hike in five years, saying the rapidly growing economy "could foster inflationary imbalances that would undermine the economy's outstanding performance."
The rate increase was widely expected, so after a brief tumble in the wake of the Fed's announcement, stocks resumed the so-called relief rally.
The Dow Jones industrial average rose 126.79, or 1.2 percent, at 10,934.57. The Nasdaq composite index rose 109.92, or 3 percent, to close at 3,717.57. The Standard & Poor's 500 gained 13.68 to 1,466.04.
Advancers beat decliners by a 4-to-3 margin on the New York Stock Exchange, with 1,669 up, 1,268 down and 473 unchanged. NYSE volume totaled 951.59 million shares vs. 851.16 million yesterday. The Russell 2000 index of smaller companies climbed 8.17 to 505.98; the NYSE composite index rose 3.05 to 658.83; but American Stock Exchange composite index fell 4.95 to 940.60.
The Treasury's 30-year bond price rose 20/32 point, or $6.25 per $1,000 in face value, on optimism the Fed will do what's needed to keep consumer prices from rising too much. Its yield fell 4 basis points to 6.11 percent.