U.S. Stocks Maintain Biggest Rally in 3 Weeks After Fed

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U.S. stocks maintained gains, for the biggest advance in three weeks, as minutes from the Federal Reserve’s latest meeting did little to change investor expectations for the timing of higher interest rates.

The Standard & Poor’s 500 Index rose 1.1 percent to 2,023.86 at 2:06 p.m. in New York.

Most Federal Reserve officials agreed their new policy guidance means they are unlikely to raise interest rates before late April, and a number expressed concern inflation could remain too low, minutes of their December meeting showed.

“Most participants thought the reference to patience indicated that the committee was unlikely to begin the normalization process for at least the next couple of meetings,” according to the minutes of the Dec. 16-17 Federal Open Market Committee meeting released today in Washington.

In a statement following the meeting, the Fed pledged to be patient in its approach to raising rates, while Chair Janet Yellen said after that meeting the central bank will probably hold rates near zero through at least the first quarter.

West Texas Intermediate crude fell 15 percent through yesterday since the Fed’s last meeting. A combination of rising supply as domestic production picks up and slower growth overseas that’s reducing demand is leading to a rout in oil prices that has continued into 2015.

Stocks rallied at the market’s open today as data stoked optimism on growth. Equities extended gains as lawmakers in Chancellor Angela Merkel’s coalition said Germany is leaving the door open to debt-relief talks with Greece’s next government, signaling a more flexible stance than her administration has taken publicly.

Before today, U.S. equities were off to the worst start for any year since 2008, with the S&P 500 dropping 4.2 percent in five days and 2.7 percent in the first three sessions of 2015. The losses trimmed the index’s return since the bull market began in March 2009 to 196 percent and followed an advance of 11.4 percent in 2014.

Bouts of volatility are getting more common in American shares. The S&P 500 has fallen more than 4 percent from a record in two separate retreats in the past month, the closest back-to-back drops of at least that size in three years.

The five-day, 4.2 percent slump in the S&P 500 came just 13 trading days after the index dropped 5 percent between Dec. 5 and Dec. 16. The span was the shortest since two pullbacks of more than 4 percent in late 2011, data compiled by Bloomberg show. Since 2009, retreats of this magnitude have happened every 51 days, on average.

Losses in equities have pushed the S&P 500’s price-earnings ratio down to 17.7 from as high as 18.5 on Dec. 29, according to data compiled by Bloomberg. The decade average is 16.3. Stocks are trading at about 1.8 times annual sales, compared with an average of 1.4 over the last 10 years.

West Texas Intermediate crude fell 15 percent through yesterday since the Fed’s last meeting. A combination of rising supply as domestic production picks up and slower growth overseas that’s reducing demand is leading to a rout in oil prices that has continued into 2015.