NEW YORK (AP) - Stocks climbed Wednesday after the Federal Reserve raised interest rates, a long-expected vote of confidence in the U.S. economy. At the same time, investors were encouraged the Fed emphasized further increases will be gradual.
The market was slightly higher at midday and rose steadily through the afternoon after the Fed released its policy statement and as Fed Chair Janet Yellen gave a news conference explaining the Fed's decision.
The Dow Jones industrial average rose 224.18 points, or 1.3 percent, to 17,749.09. The Standard & Poor's 500 index added 29.66 points, or 1.5 percent, to 2,073.07. The Nasdaq composite gained 75.77 points, or 1.5 percent, to 5,071.13.
The market finished higher for the third day in a row, something that hadn't happened in almost two months. The S&P 500 is up 3 percent over the last three days.
The biggest gainers were sectors known for paying big dividends. Utilities surged 2.6 percent, while telecommunications and consumer goods makers rose 2 percent. Only the energy sector finished lower as the price of oil dropped and natural gas continued to fall.
Paul Christopher, head global market strategist at Wells Fargo Investment Institute, said investors think big dividend payers might pay even more out to shareholders and buy back more stock because as interest rates rise, they'll be reluctant to spend a lot of money on equipment.
The Federal Reserve raised its main interest rate by a quarter of a point, a move that was widely anticipated in the markets. That rate had been near zero for seven years.