US STOCKS-Banks rally on rate outlook, lead S&P 500 to new high
(Updates to afternoon, changes comment)
By Rodrigo Campos
NEW YORK, Sept 18 (Reuters) - U.S. stocks were higher in afternoon trading on Thursday, with the S&P 500 hitting a record peak a day after the U.S. Federal Reserve renewed its commitment to keeping interest rates low.
The Fed said Wednesday at the conclusion of a two-day policy meeting it would keep interest rates near zero for a "considerable time," language supportive of equities which some had expected to be dropped from the statement.
However, the central bank's outlook included forecasts for higher-than-expected rates in 2015 and 2016, which helped financial stocks lead gains on Wall Street.
"Any rate hike will be data dependent, and the Fed won't do it anywhere in the near-to-intermediate term unless they think it will have no impact on the economy," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York.
"A higher rate structure helps financials generate more profits. Higher interest rates are not bad for (the sector) unless it meant the Fed is trying to slow the economy."
The Dow Jones industrial average was rising 95.87 points, or 0.56 percent, to 17,252.72, the S&P 500 was gaining 8.08 points, or 0.4 percent, to 2,009.65 and the Nasdaq Composite was adding 27.77 points, or 0.61 percent, to 4,589.95.
The S&P hit a high of 2,011.79. Continuación...