By Geoffrey Smith and Liz Moyer
Investing.com -- Wall Street rallied in New York on Thursday, lifted by the energy sector after strong data on jobs followed the expected interest rate hike by the Federal Reserve.
By 4:12 PM ET, the Dow Jones Industrial Average closed up 417 points, or 1.2%, the S&P 500 rose 1.2% and the NASDAQ Composite was up 1.3%. The Dow rose 1.5% on Wednesday after the Fed raised rates by 25 basis points and signaled at least another six quarter-point increases over the next 12 months.
The hike had long been anticipated by markets, which chose to focus instead on the accompanying economic forecasts from the Fed, which suggested that the tightening cycle could proceed without causing a recession.
Also helping the mood on Wednesday had been reports of a detailed peace plan drafted by Ukraine and Russia. However, the Kremlin said Thursday that reports of significant progress were "wrong" and Russia has reacted angrily to President Joe Biden's designation of Vladimir Putin as a "war criminal" on Wednesday. The comments followed reports of a Russian strike on a theater in Mariupol that was being used as a shelter by hundreds of civilians of all ages.
Analysts warned against what appeared to be some "magical thinking" by both the Fed and by some market participants, noting that even a peace deal between Russia and Ukraine will not remove all the headwinds currently blowing.
"It would be unwise to assume that even if actions do follow words, there is a return to the pre-war status quo," said Paul Donovan, chief economist of UBS Wealth Management, in a morning briefing. "Sanctions are likely to be unwound slowly...There has been an irreparable break in how the world works.”
Thursday will be the busiest day this week for U.S. economic data. Weekly jobless claims came in at 214,000, slightly below expectations. February housing starts rose 6.8% and building permits were down 1.9%. The Philly Fed index was 27.4, above expectations for a reading of 15.
In corporate news, Accenture's (NYSE:ACN) quarterly report included guidance that was above expectations and a warning about the loss of business in Russia, while Dollar General (NYSE:DG) more or less met estimates for profit and revenue. FedEx (NYSE:FDX) reports after the bell.
In commodity markets, oil prices have rebounded as the Kremlin downplayed peace talks, and Saudi Arabia and the United Arab Emirates rebuffed pleas from U.K. Prime Minister Boris Johnson for more oil. By 4:12 PM ET, U.S. crude futures were up 8.6% at $103.28 a barrel, while Brent was up 8.9% at $106.75 a barrel.
Gold Futures were up 1.5% at $1,937 an ounce.
This story was published at 7:12 AM ET and updated