NEW YORK (TheStreet) -- Stocks were climbing Thursday after the Federal Reserve assured markets it would be "patient" in determining when to raise rates.
The S&P 500 was up 1.3%, the Dow Jones Industrial Average surged 1.3%, and the Nasdaq spiked 1.5%. A day earlier, the S&P and Dow posted their strongest percentage gains of the year.
"The committee considers it unlikely to begin the normalization process for at least the next couple of meetings," said Fed Chair Janet Yellen in a press conference on Wednesday. "This assessment, of course, is completely data-dependent."
This timeline is as expected, said Wells Fargo's Cameron Hinds. "Market consensus is that they will start to raise rates during the next summer," he said.
Weekly jobless claims backed up the Fed's positive assessment of the job market as the number of new filings for unemployment benefits slipped 6,000 to 289,000 for the week ended Dec. 12, the Labor Department said. Economists had expected 295,000 claims for unemployment benefits for the week.
The Philadelphia Fed reported a slower pace of manufacturing activity in December with a reading of 24.5 compared to 40.8 in November. Analysts had expected a reading of 25. The latest figures could give pause to a data-dependent Fed which has had to contend with a patchy economic recovery.
"While the Fed is more optimistic about achieving its employment goal, it continues to fret about the lack of progress on its inflation target (hence the need to 'monitor inflation developments closely')," Douglas Porter, chief economist for BMO Capital Markets, said in a report. "This means that, even if the unemployment rate falls as expected toward the presumed neutral range of 5.2% to 5.5% next year, the Fed could delay tightening if (core) inflation holds well below 2%."