* Fed raises rates as expected; job gains stoke confidence
* Bond yields fall after Fed decision
* European focus also on Dutch elections
(Updates with Fed decision, afternoon trading)
By Lewis Krauskopf
NEW YORK, March 15 U.S. stocks added to gains,
while Treasury yields fell and the dollar weakened on Wednesday,
after the Federal Reserve raised interest rates for the second
time in three months but did not flag any plan to accelerate the
pace of monetary tightening.
The central bank's rate increase was spurred by steady
economic growth, strong job gains and confidence that inflation
is rising to the central bank's target. Investors had widely
expected the rate increase.
But the Fed's policy-setting committee did not flag any plan
to accelerate the pace of monetary tightening. Although
inflation is "close" to the Fed's 2-percent target, it noted
that goal was "symmetric," indicating a possible willingness to
allow prices to rise at a slightly faster pace.
"The angst out there in the market was the Fed was going to
come out swinging. There was none of that in the statement,"
John Canally, investment strategist and economist at LPL
Financial in Boston. "The rate hike was priced in and we got
Markets could remain volatile as Fed Chair Janet Yellen
holds a news conference starting at 2:30 pm EDT (1830 GMT).
The Dow Jones Industrial Average rose 96.65 points,
or 0.46 percent, to 20,934.02, the S&P 500 gained 16.79
points, or 0.71 percent, to 2,382.24 and the Nasdaq Composite
added 35.65 points, or 0.61 percent, to 5,892.47.
MSCI's all-country world stock index gained
The dollar fell 0.7 percent against a basket of key
currencies and hit a one-week low against the yen, while
the euro hit a session high against the greenback.
Prices on benchmark 10-year Treasuries rose
17/32 to yield 2.533 percent, from 2.595 percent late on
U.S. crude rose 1.9 percent to $48.64 a barrel, after
touching a three-month low a day earlier, while benchmark Brent
gained 1.5 percent to $51.67 a barrel.
Before the decision, crude had been lifted by a surprise
drawdown in U.S. crude inventories and data from the
International Energy Agency suggesting OPEC cuts should create a
crude deficit in the first half of 2017.
Earlier, the pan-European STOXX 600 index gained
0.4 percent, helped by energy and basic resource stocks
Europe markets also focused on Dutch elections, where
anti-EU firebrand candidate Geert Wilders is providing the
latest test of anti-establishment and anti-EU sentiment.
(Additional reporting by Ann Saphir, Editing by Nick Zieminski)