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Stocks surge, chalking up their biggest gains in years

December 18, 2014, 9:37 PM UTC
Stocks Rise On Federal Reserve Interest Rate Decision
NEW YORK, NY - DECEMBER 17: Traders work on the floor of the New York Stock Exchange during the afternoon of December 17, 2014 in New York City. Stocks rose nearly 300 points, marking the best day for the Dow Jones Industrial Average of 2014, after the Federal Reserve announced it plans to begin raising interest rates next year. (Photo by Andrew Burton/Getty Images)
Photograph by Andrew Burton — Getty Images

U.S. stock indexes surged Thursday, with the Dow rallying over 400 points, driven higher by reassurances from the Federal Reserve that it won’t imminently raise interest rates.

The broad S&P 500 index posted its biggest jump in nearly two years, extending a Fed-fueled rally from the previous day, as tech shares gained after stronger-than-expected results from business software giant Oracle (ORCL).

The Dow Industrials also posted big gains following a rally in the prior trading session, marking the biggest two-session percent increase for blue-chip index since November 2011, according to The Wall Street Journal.

The Dow Jones industrial average closed the day up 421 points, or 2.4%, while the S&P 500 gained 48 points, or 2.4%, and the Nasdaq composite added 104 points, or 2.2%.

The S&P 500 had fallen nearly 5% from its most recent record high on Dec. 5 before the strong gains on Wednesday and Thursday.

Earlier in the session, data showed weekly jobless claims fell more than expected, suggesting the labor market continues to strengthen. However, readings on the U.S. services sector and mid-Atlantic factory activity indicated a slower pace of growth.

Rite Aid (RAD) shares surged 11.9% to $6.78 after the drugstore chain’s quarterly results topped expectations and it boosted its 2015 outlook. Shares of Apple (AAPL) climbed 3% to $112.65.

Stock indexes rallied as investors continued to find good cheer in the Federal Reserve’s accommodative approach to monetary policy. On Wednesday, the Fed said it would be patient about the timing of its first rate hike, suggesting its expected increases will be slow and steady.

—Reuters contributed to this report.