US STOCKS-Wall St rallies as Fed points to gradual tightening
* Fed raises key rate by 25 basis points
* Utilities sector leads gains, energy lags
* S&P 500 on track for third consecutive day higher
By Rodrigo Campos
NEW YORK, Dec 16 (Reuters) - U.S. stocks rallied in volatile trading on Wednesday after the Federal Reserve announced it is raising its key policy rate for the first time in nearly a decade.
Markets judged the Fed's statement to be dovish, supportive of risk assets including equities.
The Fed made clear that the 25-basis point rate hike was a tentative beginning to a "gradual" tightening cycle, and that in deciding its next move it would put a premium on monitoring inflation, which remains mired below target.
"Wrapped in dovish language, the Federal Reserve has just embarked on what will be the loosest tightening in its history," said Mohamed El-Erian, chief economic advisor at Allianz in Newport Beach, California.
"The Fed is going out of its way to assure markets that, by embarking on a 'gradual' path, this will not be your traditional interest rate cycle. Instead it will be one remembered as an unusually loose tightening." Continuación...