Energy shares were also in demand after oil prices also rose on a weaker dollar, extending gains from the previous session when a surprise third consecutive weekly U.S. crude inventory draw tightened supply. Real estate companies rose as investors looked for income, as did telecom stocks, which also typically pay higher-than-average dividends.
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In early trading, the three indexes – the S&P 500, the Nasdaq and the Dow Jones – were all on track to mark their third consecutive day of gains.
The newly created real estate component of the S&P 500 climbed 1.9%, far more than any other sector. The statement the Fed released following its two-day policy meeting pointedly said that the case for raising overnight rates had “strengthened”, its projections showed that all but three of meeting participants envisaged higher rates by year-end, and Fed Chairwoman Janet Yellen in her news conference said she was “pleased with how the USA economy is doing”.
“The Fed is in no hurry to raise rates”, Arnaud Masset, market analyst at Swissquote Bank, said via e-mail.
At the same time, policymakers cut the number of rate increases they expect this year to one from two previously, according to the median projection of forecasts released with the statement.
The decision caused bond prices to rise and the USA dollar to fall against other major currencies, which in turn help boost commodity prices since they are priced in dollars.
USA stock index futures were slightly lower on Friday as oil prices came off a two-week high, a day after the Nasdaq closed at a record high for the second straight day.
The OECD has downgraded USA economic growth predicted as 1.4% by 0.4% for 2016 and down 0.1% to 2.1% for next year. Murphy Oil and Transocean both rose 5 percent.
Technology stocks advanced. Shares in Amazon rose 1.9 per cent to $804.86, after hitting a record following a price target raise by BMO.
Telecommunications stocks, which also carry a higher-than-average dividend, also rose more than the rest of the market.
JPMorgan JPM.N rose 0.5 percent and was the top boost on the S&P financial index .SPSY after striking a deal with Wal-Mart WMT.N to process payments. Freeport-McMoRan, the mining giant, jumped 4.2 percent.
Red Hat RHT.N rose 6.7 percent to $82.27 after the Linux operating system distributor reported second-quarter revenue and profit that beat market expectations.
BONDS AND CURRENCIES: U.S. government bond prices rose. Interest rate futures 0#FF: were pricing in roughly a 60 percent chance of a rate increase by December, little changed from before the Fed meting.
CURRENCIES: The dollar climbed to 101.10 yen from 100.84 yen in late trading Thursday.
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Dow member Boeing rose 1.0 per cent following a World Trade Organisation ruling that said the European Union had failed to end illegal subsidies for Airbus.
