US STOCKS-Wall St rallies on gradual Fed tightening, improving economy
(Adds VIX, FedEx, updates volume)
* Fed raises key rate by 25 basis points
* Utilities sector leads gains, energy lags
* S&P 500 ends up for third consecutive day
By Rodrigo Campos
NEW YORK, Dec 16 (Reuters) - U.S. stocks rallied on Wednesday after the Federal Reserve announced it is raising its key policy rate for the first time in nearly a decade in a sign of confidence in the U.S. economy.
Markets judged the Fed's statement to be dovish, supportive of risk assets including equities. Defensive sectors of the market, recently hit in anticipation of the rate hike, were the best performers.
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. Continuación...