The Dow Jones industrial average had its biggest surge in three years Thursday, its second straight triple-digit gain following the Federal Reserve’s reassurance that it was in no hurry to raise interest rates.
Bullish earnings from technology giant Oracle also drove the rally, which has helped stocks erase an early-December slump. Industrial and health care stocks also logged big gains. Even the energy sector advanced, despite another drop in the price of oil.
Fed Chair Janet Yellen said Wednesday that she foresaw no rate hike in the first quarter of 2015. The comments eased concerns that policymakers would start raising interest rates at a time when growth outside the U.S. appears to be flagging. They also helped investors look past worries about the impact of a slumping oil price and turmoil in Russia, where the currency has slumped.
“What we’re seeing is a move back to fundamentals,” said Karyn Cavanaugh, a senior market strategist at Voya Investment Management. “Earnings continue to be good … the U.S. economy is continuing to do well.”
The Standard & Poor’s 500 index rose 48.34 points, or 2.4 percent, to 2,061.23. The Dow Jones industrial average gained 421.28 points, also 2.4 percent, to 17,778.15. The Nasdaq Composite gained 104.08 points, or 2.2 percent, to 4,748.40.
Oracle was the biggest gainer in the S&P 500 index after it reported earnings late Wednesday that beat the expectations of Wall Street analysts. The company said its software and cloud revenue grew 5 percent. The stock rose $4.19, or 10.2 percent, to $45.35. The company’s advance helped push up the tech sector 3 percent.
Investors are betting that as the economy improves and unemployment continues to fall, companies will start to invest in technology to boost productivity.
Stocks rose sharply Thursday even as oil resumed its slide.
The price of oil fell $2.36 to close at $54.11 a barrel, after rising as high as $58.71 in morning trading. Oil has plunged since June, when it peaked at $107 a barrel. Overproduction and weak demand are behind the fall in global oil prices. Brent crude, a benchmark for international oil, fell $1.91 to close at $59.27 in London.