Stock Market Today: Bulls Charge as Fed Allays Rate Hike Concerns

NEW YORK (TheStreet) -- The Wall Street crowd went wild for equities after the dovish tone in the minutes of the Federal Reserve's latest meeting allayed fears an interest rate hike could come sooner than expected.

The Dow Jones Industrial Average rose 1.64%, while the S&P 500 advanced 1.75% and the Nasdaq moved 1.9% higher. Prior to the 2 p.m. EST release of the minutes, markets had hovered around the flatline.

Watch the video below for a closer look at how U.S. markets ended the trading day Wednesday:

Members of the Fed were said to have shown concern "that the reference to 'considerable time' in the current forward guidance could be misunderstood as a commitment rather than as data dependent," said the minutes of the Sept. 16-17 Federal Open Market Committee meeting.

Wall Street was worried the Fed could enact an interest rate hike sooner than expected after a series of data points indicated the U.S. economic recovery charging ahead. A prolonged period of interest rates at zero has been dependent on the Fed's ability to keep the inflation rate under its target 2%.

The Fed noted macro headwinds and a stronger dollar could stunt U.S. economic growth which has been showing increasing strength of late. The International Monetary Fund trimmed its global growth forecasts on Tuesday and said Europe has a one-in-three chance of falling back into recession on deflation concerns.

Volatility continues to increase as U.S. equity prices swoon in this seasonally weak time of year for stocks. But that shouldn't keep investors from staying long in quality U.S. stocks, according to David Lafferty, chief market strategist for Natixis Global Asset Management. It's estimated that companies will grow earnings by 5% for the third quarter, but Lafferty said his expectations are slightly higher than that.

"We've had this pre-announcement vacuum," Lafferty said, as companies try to break the negative news ahead of their scheduled earnings releases.

Aluminum giant Alcoa (AA) , the unofficial forerunner of earnings season, reported third-quarter profit of 31 cents a share, 8 cents higher than anticipated, after the bell. Revenue climbed 8.2% to $6.23 billion. Shares rose 1.9% after market close.

J.C. Penney (JCP) gave up nearly 11% after warning of softer sales than expected in September. Though guidance wasn't affected, management tweaked its comparable-store sales estimates to a low-single-digit increase from previous estimates of a mid-single-digit increase.

Apple (AAPL)  said Wednesday it was surprised by supplier GT Advanced's (GTAT)  bankruptcy filing earlier this week. The iPhone maker said it would work with officials to retain jobs in GT's Arizona factory that it helped to finance. GT's shares were down 9.1%. Since the beginning of the week, the stock has tanked nearly 90%.

Actavis  (ACT)  is gearing up to court Allergan (AGN)  yet again. Pharmaceuticals company Allergan has been on the receiving end of numerous acquisition offers, most persistently from Valeant (VRX)  and Bill Ackman's Pershing Square which has new plans to increase its offer above $190 share, according to reports. Allergan has previously stated it would not accept an offer less than $200 a share. Shares of the company gained 2.3%.

Alternative energy company Plug Power (PLUG) moved 5.8% higher after New York Gov. Andrew Cuomo toured its factory and elaborated on recent zero-percent manufacturing tax for operations in the state.

Yum! Brands (YUM)  rose 1.5% even after missing earnings forecasts and slashing its full-year outlook on the impact of the food safety scare in China. However, the guidance was lowered by less than some had expected as the company expressed confidence that its brands will be able to rebound in China.

PepsiCo (PEP) will report earnings before the bell Thursday and analysts anticipate a 1.2% sales increase even as its soda business has weakened. Family Dollar (FDO) , also reporting premarket Thursday, is expected to post a 10% drop in earnings for the quarter.

-- Written by Keris Alison Lahiff in New York.

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