Stocks climb as Fed shows caution on interest rate increase

Equities markets rose sharply Wednesday afternoon after the Federal Reserve said the U.S. economy was improving and that it would be "patient" in determining when to raise interest rates. Energy stocks jumped after the price of oil recovered some of its recent losses.

At midafternoon on Wall Street, the Standard & Poor's 500 index was up 22.7 points, about 1.2 percent, at 1,995.8. The Dow Jones industrial average gained 171.4 points, about 1 percent, at 17,240.2, and the Nasdaq composite added 61 points, about 1.3 percent to 4,608.7.

FED MEETING: The Federal Reserve indicated it was moving closer to raising interest rates from record-low levels because the U.S. economy and job market are becoming stronger. The central bank also promised to take a "patient" approach in doing so, reassuring investors that it wouldn't tighten credit too soon and endanger the U.S. economic recovery.

ANALYST RESPONSE: The market is saying that "the Fed is not going to surprise us with anything, or rush in to tighten next year," said Sean Lynch, managing director of global equity strategy at Wells Fargo Private Bank. Increased confidence in the economy and subdued inflation is "a good backdrop" for stocks, Lynch said.

ENERGY RALLY: Energy stocks led gains for the S&P 500 index as the price of oil recovered some of its recent losses. Stocks in the sector jumped 4.4 percent, reducing their losses in the last three months to 18 percent. Nabors Industries was the biggest gainer in the S&P 500 index, surging $1.30, or 12.32 percent, to $11.80.

OIL: U.S. crude turned higher in afternoon trading. Oil rose $1.21, or 2.2 percent, to $57.14 a barrel on the New York Mercantile Exchange.

RUSSIA FOCUS: Russia remained in focus on concerns about the impact of the recent slide in the ruble. The currency has lost more than 50 percent of its value this year. After falling again early Wednesday, the ruble recovered and was 14 percent higher at 60 rubles to the dollar.

The currency recovered some of its losses Wednesday after Russian authorities indicated that they would sell foreign currency to relieve pressure on the ruble. The Russian currency has suffered in the wake of sliding oil prices and sanctions imposed over Russia's involvement in Ukraine's crisis.