NEW YORK (CNNfn) - U.S. stocks cheered the Federal Reserve's decision to make Wednesday's interest rate hike the last for a while, with both blue chips and technology shares leaping in relief.
According to preliminary data, the Dow Jones industrial average ended the day up 131.08 points, or 1.2 percent, at 10,946.43, having spent most of the day before the Fed announcement in the red. On the New York Stock Exchange, advances crushed declines by 1,936 to 1,112 as volume picked up to a heavy 918 million shares.
The Nasdaq Composite also wiped out its early losses, rallying 44.16 points, or 1.6 percent, to close at a new record high of 2,686.27. The S&P 500 index gained 17.78, or 1.3 percent, to its own record of 1,369.23.
As was widely expected, the Fed's policy-making Federal Open Market Committee raised the fed funds rate, the rate at which banks make overnight loans to each other, by 25 basis points to 5 percent from 4.75 percent.
However, the real news for the market was the central bank's decision to adopt a neutral bias -- meaning more interest rate hikes are unlikely in the near term unless inflationary pressures resurface in full force.
The rate-sensitive bond market bounced back from a morning spent in the red, with the bellwether 30-year Treasury bond rallying a full point in price. The yield, which travels in the opposite direction from the price, tumbled to 5.98 percent.
The dollar, which flourishes when interest rates are rising, gained against the yen but eased against the euro.