Apple's tech rally brings brighter day for Wall Street

A tech rally led by Apple Inc pushed Wall Street's main indexes higher on Thursday, offsetting losses in U.S. lenders after the Federal Reserve decided not to raise interest rates this year.

In a big shift to their outlook, policymakers said the Fed's benchmark overnight interest rate was likely to remain at current levels at least through this year and flagged an expected slowdown in the economy. Interest rate sensitive banking stocks fell 1.54 per cent, while the broader financial sector slipped 0.49 per cent and was the only S&P sector trading lower.

"After the initial reaction on the Fed's growth outlook and that being a reason why they're not going to raise interest rates, the markets believe that with the Fed on hold the economy will start to show improvement," said Carin Pai, executive vice president at Fiduciary Trust Company International based in New York City. "It's a broad market rally, but the performance of the market is still being led by the cyclical areas, which suggests there is a risk on sentiment."

Technology stocks rose 1.68 per cent on the back of gains in Apple Inc and chipmakers. The iPhone maker's shares jumped 3.2 per cent after analysts said they expected the company's video service, which launches on Monday, to make a material impact on its future earnings.

Micron Technology Inc jumped 7.9 per cent after the company said it sees a recovery in memory chips, driving a 2.84 per cent gain in the Philadelphia chip index. Expectations of a largely dovish Fed and hopes of the United States and China reaching a trade resolution have spurred a rally in stocks this year, with the S&P 500 now just 3.3 per cent away from its record closing high in September.

Investors will now keep a close watch on trade talks as top U.S. officials travel to Beijing next week to resume negotiations. At 12:38 p.m. ET the Dow Jones Industrial Average was up 136.40 points, or 0.53 per cent, at 25,882.07. The S&P 500 was up 18.35 points, or 0.65 per cent, at 2,842.58 and the Nasdaq Composite was up 64.71 points, or 0.84 per cent, at 7,793.68.

The tech-heavy Nasdaq is set to post its fifth consecutive session of gains. Among stocks, Biogen Inc tumbled 28.4 per cent after the drugmaker and its partner Eisai Co Ltd said they would discontinue two studies testing an Alzheimer's drug.

Levi Strauss & Co surged 33.2 per cent and was the second biggest percentage gainer across U.S. stocks after the 165-year-old U.S. jeans maker returned to the public market after three decades. Conagra Brands Inc jumped 11.2 per cent after the food packaging company's quarterly profit topped estimates.

Advancing issues outnumbered decliners by a 2.36-to-1 ratio on the NYSE and by a 1.84-to-1 ratio on the Nasdaq. The S&P index recorded 40 new 52-week highs and three new lows, while the Nasdaq recorded 69 new highs and 22 new lows.