Stocks Hold Higher After Fed Rate Decision

Wall Street held on to its gains Wednesday after the Federal Reserve kept short-term interest rates steady as expected, but left the door open to additional rate hikes.

The Federal Open Market Committee said it is seeing a continuing moderation in economic growth, partly reflecting the cooling of the housing market. It added that inflation pressures seem likely to moderate over time, but said some inflation risks remain.

Click here to visit's Investing page.

"The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information," the Fed said in its policy note.

Stocks were already higher before the Fed announcement, rebounding from Tuesday's session after Oracle Corp. said its quarterly profit rose 29 percent and Morgan Stanley reported a strong quarter.

Markets were unsettled Tuesday by a bloodless coup in Thailand that ousted the unpopular caretaker prime minister and left the chief of the army in charge. European markets rebounded smartly Wednesday.

In afternoon trading after the Fed's announcement, the Dow Jones industrial average gained 66.52, or 0.58 percent, to 11,607.43.

Broader stock indicators were higher. The Standard & Poor's 500 index rose 7.38, or 0.56 percent, to 1,325.69, and the Nasdaq composite index, lifted higher by Oracle's news, rose 25.31, or 1.14 percent, to 2,247.68.

Advancing issues led decliners by more than 2 to 1 on the New York Stock Exchange.

Bonds rose, with the yield on the 10-year Treasury note falling to 4.72 percent, down from 4.73 percent Tuesday. The U.S. dollar was mixed against other major currencies. Gold prices fell.

Crude oil futures fell. A barrel of light crude was quoted at $60.90, down 76 cents, in trading on the New York Mercantile Exchange.

In company news, Oracle (ORCL) rose $1.88, more than 11 percent, to $18.01, a 52-week high, after it said its first quarter revenue shot up nearly 30 percent from the year ago quarter.

Investment banking firm Morgan Stanley (MS) rose 51 cents to $72.36 after it said third-quarter profit surged on stronger performance from its institutional securities group, surpassing analysts' expectations.

BP PLC (BP) rose 4 cents to $65.24 after it said it plans to invest $3 billion in an Indiana refinery, increasing its production of motor fuels by about 15 percent.

Toyota Motor Corp. (TM) is aiming to sell 9.8 million vehicles globally in 2008, the company's president said, as the booming Japanese automaker quickens its pace to overtake General Motors as the world's No. 1 while U.S. automakers flounder. Its U.S. shares rose 72 cents to $107.08.

The Russell 2000 index of smaller companies was up 7.13, or 0.98 percent, at 732.58.

Overseas, Japan's Nikkei stock average fell 0.98 percent. Britain's FTSE 100 rose 0.59 percent, Germany's DAX index gained 1.38 percent, and France's CAC-40 rose 1.50 percent.

Click here to visit's Investing page