Wall Street stocks rise despite Fed's plan to cut bond purchases

Sept 23 Reuters - Wall Street was set to rose on Thursday after investors largely dismissed concerns over the Federal Reserve's plans for tapering while forecast raises from Accenture and Salesforce added to the positive mood.

The Fed said on Wednesday that it could begin reducing monthly bond purchases by as soon as November, and that interest rates could increase quicker than expected by next year. The central bank also projected inflation by the year-end at 4.2%, more than double its target rate of 2%.

Relief over the Fed, along with efforts by Chinese property developer Evergrande to ease worries of a default, saw all three Wall Street indexes jump about 1% on Wednesday.

The Dow and the S&P Marked their best day in two months as they staged a strong recovery from two-month lows hit earlier in the week.

The Fed's stance is still accommodative and it's reasonable for the Fed to want to return to a state of normalcy if the economy is as robust as the data suggests, said Mike Loewengart, managing director, E TRADE Financial.

Given recent volatility, it s likely that investors are viewing the potential 2022 taper projection and the future rate hikes as a vote of confidence that the recovery is on track. U.S. S&P 500 E-minis were gaining 27 points or 0.62% at 08:31 a.m. Dow E-minis were up 235 points, or 0.69%, while Nasdaq 100 E-minis were up 80.75 points, or 0.53%.

Futures showed little reaction to a bigger than expected rise in weekly jobless claims.

Wall Street indexes are still trading lower for the month, owing to seasonally weak trends as well as concerns over fiscal spending and a slowdown in economic growth.

Major banks rose on the premarket trade expectations of an eventual rise in interest rates.

Investors await preliminary business activity data for September, due at 9: 45 a.m. ET 1345 GMT A Reuters poll expects overall increase in manufacturing and services activity to have remained stable through the month.