By Noel Randewich
(Reuters) - U.S. stocks surged on Wednesday after the Federal Reserve said it would be patient in lifting borrowing costs further this year, reassuring investors worried about a slowing economy.
Along with better-than-feared quarterly results from Apple Inc , the Fed's comments helped Wall Street reverse two down days triggered by profit warnings from U.S. bellwethers that signalled a bigger impact from a slowdown in China.
The Fed held interest rates steady, as widely expected.
While the Fed said continued U.S. economic and job growth were still "the most likely outcomes," it removed language from its December policy statement that risks to the outlook were "roughly balanced" and struck language that projected "some further" rate hikes would be appropriate in 2019.
Investors in recent months have become more concerned about the global economy. Recent U.S. corporate results have shown companies including Apple, Intel Corp and Caterpillar Inc are feeling the effects of slowing expansion of China's economy, which has been hurt by a trade conflict with the United States.
"They seem to be, for lack of a better term, capitulating to the market at this point. Which is, 'we are paying attention to the volatility, we are paying attention more to the downside risks more than the upside risks'," said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.
Apple shares jumped 6.5 percent after reporting a sharp growth in services business, easing concerns after the iPhone maker earlier this month cut current-quarter sales forecast.
Boeing Co gained 6.7 percent after the world's largest planemaker forecast full-year profit and cash flow above analysts' estimates amid a boom in air travel and speedier 737 production.
Following the Fed's rate announcement, all three main U.S. stock indexes extended gains from earlier in the session.
At 2:25 p.m. ET, the Dow Jones Industrial Average was up 1.87 percent at 25,038.99 points, while the S&P 500 had gained 1.65 percent to 2,683.46.
The Nasdaq Composite added 2.1 percent to 7,175.93.
Investors are also tracking the latest round of talks between Washington and Beijing that began on Wednesday, the highest-level meeting since U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce to their trade war in December.
The Philadelphia Semiconductor index surged 2.9 percent, while the S&P technology index jumped 3.0 percent.
Microsoft Corp and Facebook Inc, set to report after the closing bell, were up more than 2 percent.
Of the 168 S&P 500 companies that have reported results so far, 73.2 percent have topped profit estimates, according to Refinitiv data.
Advancing issues outnumbered declining ones on the NYSE by a 4.29-to-1 ratio; on Nasdaq, a 2.38-to-1 ratio favoured advancers.
The S&P 500 posted 18 new 52-week highs and no new lows; the Nasdaq Composite recorded 23 new highs and 25 new lows.
(Additional reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by James Dalgleish and Lisa Shumaker)
Disclaimer: No Business Standard Journalist was involved in creation of this content
