U.S. stocks move higher, as dovish Fed mins add support for delayed hike

Investing.com - Investing.com -- U.S. stocks closed broadly higher, rising sharply on Thursday afternoon after the minutes from the Federal Open Market Committee's September meeting provided indications that the U.S. central bank could wait longer than previously expected before increasing short-term interest rates.
During its September monetary policy meeting, the FOMC voted nearly unanimously to leave its benchmark Federal Funds Rate unchanged, marking the 55th consecutive meeting that it decided to hold rates at its current near-zero level. Citing mounting concerns related to slowing growth in China along with a host of emerging market economies, the Fed decided the timing was not appropriate to normalize monetary policy. The deceleration in economic growth, according to the minutes, led to a spike in the dollar, which the Fed believes is holding down inflation.
Long-term inflation has remained under the Fed's targeted goal of 2% in every month for the last three years. The FOMC also expressed trepidation that a premature rate hike could "erode the credibility" of its inflation objective, if long-term inflation stayed below 2% for a prolonged period. In September, the Fed forecasted that its preferred gauge of inflation will not reach its 2% target until at least the end of 2018.
The Dow Jones Industrial Average and the S&P 500 Composite index moved steadily higher following the release, while the NASDAQ Composite index reversed territory to close slightly up for the session. The Dow gained 138.46 or 0.82% on Thursday to close at 17,050.75, while the NASDAQ added 19.64 or 0.41% to 4,810.79, as shares in Apple Inc (NASDAQ:AAPL) weighed. Prior to the announcement, the Dow was up by roughly 30 points on the day.
The S&P 500, meanwhile, gained 17.60 or 0.88% to 2,013.43, as all 10 sectors closed in the green. Stocks in the Energy, Industrials and Utilities industries led, each gaining more than 1.2% on the session.
The relatively dovish minutes from the September meeting may bolster arguments that the FOMC could wait as long as March of next year before lift-off. Previously, it was widely believed the FOMC could raise rates either this month or when it meets in December.
The top performer on the Dow was Nike Inc (NYSE:NKE), which added 2.80 or 2.29% to 124.90. Nike (NYSE:NKE) was among the worst performers on the Dow during the two previous sessions. Shares in Nike are up nearly 40% over the last year, as the athletics apparel giant remained near an all-time record high. The worst performer was Apple Inc (NASDAQ:AAPL), which fell 1.39 or 1.25% to 109.39.
The biggest gainer on the NASDAQ was Netflix Inc (NASDAQ:NFLX), which surged 6.67 or 6.17% to 114.77 after the video streaming giant announced that it will hike rates on its standard plan by a dollar to $9.99 a month. The worst performer was eBay Inc (NASDAQ:EBAY), which plummeted 1.56 or 6.06% to 24.13, after rival AMZN launched a handmade craft site on Thursday morning.
The top performer on the S&P 500 was Noble Energy Inc (NYSE:NBL), which jumped 2.21 or 6.31% to 37.26. U.S. crude futures rose by more than 3% during Thursday's session, nearly reaching $50 a barrel for the first time since late-July. Ebay was also the worst performer just below Skyworks Solutions Inc (NASDAQ:SWKS), which fell 4.15 or 4.96% to 79.46. Earlier this week, Skyworks Solutions, a chip supplier to Apple (NASDAQ:AAPL), acquired PMC-Sierra, Inc. in an all-cash deal valued at $2 billion.
Third quarter earnings season will kick into high-gear following the close of trading when metals giant Alcoa Inc (NYSE:AA) releases its quarterly report. It marks Alcoa (NYSE:AA)'s first quarterly report since the company announced last month that it will split into two publicly traded companies later next year.
On the New York Stock Exchange, advancing issues outnumbered declining ones by a 2,397 to 718 margin.