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Benchmarks’ upward move continued for the fourth-straight trading day on Wednesday after the Federal Reserve kept its monetary policy “highly accommodative” and suggested there would be no immediate rate hikes. The central bank’s move to trim the bond repurchase yet again by $10 billion was widely accepted as the benchmarks scored their best gains in about four weeks. The S&P 500 hit an all-time high; the twentieth occasion it did so this year.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article

The Dow Jones Industrial Average (DJI) closed shy of a three-digit gain as it jumped 98.13 points, or 0.6%, to 16,906.62. The Standard & Poor 500 (S&P 500) gained 0.8% to finish Wednesday’s trading session at 1,956.98. The tech-laden Nasdaq Composite Index closed at 4,362.84; gaining 0.6%. The CBOE Volatility Index (VIX) slumped 12.0% to settle at 10.61.
 
Benchmarks were trading mostly flat and languished in negative territory for a while, until the Fed’s policy statement came out at 2PM ET. The Federal Open Market Committee (FOMC) has decided during its two-day policy meeting to remain committed to its low-interest rates. The central bank allayed fears of near-term rate hikes but tweaked target interest rate forecasts. Reportedly, the Fed expects interest rates at the end of 2015 to approach 1.25%, up from March’s projection of 1.0%. The ‘dot plot’ also notes that the key rate is likely to increase to roughly 2.5% at the end of 2016, up from prior projection of 2.25%. However, the longer term rate forecast is now down to 3.75% from about 4%.
 
Moreover, the Fed continued to reduce its monthly asset repurchase plan. The central bank trimmed its bond buyback plan for the fifth consecutive month, by $10 billion. The asset repurchase plan now stands at $35 billion a month. According to its statement, the FOMC will most “likely reduce the pace of asset purchases in further measured steps”. That also keeps Fed’s plans on track to end the repurchase plan by the end of this year.
 
Separately, the central bank trimmed 2014 growth projection to 2.1% to 2.3%, down from 2.8% to 3%. Nonetheless, the central bank kept its growth forecast unchanged for 2015 and 2016 at 3% to 3.2% and 2.5% to 3%, respectively. The Fed also said: “Growth in economic activity has rebounded in recent months”.
 
Federal Reserve Chairwoman Janet Yellen’s press conference after the release of the FOMC statement further boosted markets. According to Yellen, the central bank will consider a “wide range of indicators” on the labor market for deciding to hike rates. She added there “is no mechanical formula” to help Fed decide on raising the rates. Speaking at the press conference, she was optimistic about the economic situation and said:  “Economic activity is rebounding in the current quarter and will continue to expand at a moderate pace thereafter”.
 
There were hardly any economic data that could change benchmarks’ direction yesterday. Concerns emanating from Iraq’s sectarian clashes too were largely overlooked. Nymex WTI crude oil for July delivery lost 39 cents to $105.97. Brent oil for August delivery however increased 85 cents to $114.30 per barrel. Meanwhile Reuters reported that Iraq's state-run South Oil Company’s head said Exxon Mobil Corporation (NYSE:XOM) and BP plc (BP) have been evacuating staff from the nation.
 
Among the day’s biggest gainer was FedEx Corporation (NYSE:FDX). Shares of this leader in global express delivery service jumped 6.2%, somewhat helping the broader markets’ rally. Shares jumped after the company reported upbeat fourth-quarter fiscal 2014 results. Quarterly adjusted earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.36 and also improved from the year-ago adjusted earnings of $2.13 per share. Fourth quarter revenues of $11.8 billion beat estimates of $11.6 billion and were higher than year-ago revenues of $11.4 billion. Meanwhile, Adobe Systems Inc. (NASDAQ:ADBE) shot up 8.2% after reporting better-than-expected second quarter earnings and sales.
 
The utilities sector notched significant gains yesterday and emerged as the best gainer among the S&P industry groups. The Utilities Select Sector SPDR ETF (XLU) jumped 2.3%. Key stocks from the sector such as Duke Energy Corporation (NYSE:DUK), NextEra Energy, Inc. (NYSE:NEE), Dominion Resources, Inc. (NYSE:D), Southern Company (NYSE:SO), Exelon Corporation (NYSE:EXC) gained 2.4%, 2.0%, 2.2%, 2.5% and 1.5%, respectively.

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