The Fed powers a monster rally on Wall Street

NEW YORK - A pledge from the Federal Reserve to remain "patient" in deciding when to lift interest rates gave the stock market its biggest gain in more than a year.

Stocks rose from the open on Wednesday, led by the energy sector, as oil prices showed signs of stabilizing after their big slump in recent months. The market's gains were extended after Fed policymakers released a statement following the end of its most recent policy meeting.

The Standard & Poor's 500 index rose 40.15 points, or 2.04 percent, to close at 2,012.89. That was the biggest increase for the index since October 2013. The Dow Jones industrial average rose 288 points, or 1.7 percent, to end at 17,356.87. The Nasdaq composite climbed 96.48 points, or 2.1 percent, finishing at 4,644.31.

A near six-year bull run for the stock market has come against a background of exceptional stimulus from the Fed. At the start of the month investors had worried that signs of strengthening hiring would lead the Fed to bring forward the start of rate increases.

"The Fed is going to be our friend for a very long time," said Burt White, chief investment officer for LPL Financial. "Growth continues to be good and corporate America is healthy. If you mix all that together it translates to rising stock prices."

Stock investors have had a wild ride in the final quarter of the year. The market plunged at the start of October on concerns that global growth was slowing. Then it rebounded and surged to record levels at the start of December, before falling sharply last week as the price of oil collapsed, dragging down energy stocks.

On Wednesday, energy stocks led gains for the S&P 500 index as the price of oil steadied. Stocks in the sector jumped 4.2 percent, reducing their losses for the year to 13 percent.

The price of U.S. oil rose Wednesday after the Energy Department reported a decline in inventories, a turnaround from a Tuesday report of increased inventories from the American Petroleum Institute, an industry group.

Benchmark U.S. crude rose 54 cents to close at $56.47 a barrel in New York. Brent crude for February delivery, a benchmark for international oil used by many U.S. refineries, rose $1.17 to close at $61.18 a barrel in London. The January Brent contract expired Tuesday at $59.86.

Stocks that were linked to Cuba surged after President Barack Obama announced the re-establishment of diplomatic relations on Wednesday and declared an end to America's "outdated approach" to the communist island in a historic shift aimed at ending a half-century of Cold War enmity.

Copa Airlines (CPA), a Panama City-based carrier, and one of the most successful airlines in Latin America, jumped. Its stock rose $6.36, or 7.2 percent, to $94.48 on the news.

The Herzfeld Caribbean Basin Fund (CUBA), a closed-end fund designed to take advantage of greater trade with Cuba, surged $1.97, or 28.9 percent, to $8.78.

Among individual names, FedEx (FDX) was one of the biggest losers in early trading after in the shipping company reported earnings that fell short of Wall Street's expectations. The company said a jump in plane maintenance costs blunted gains the company reaped from managing costs, lowering its pension expense and growing its export package revenue. The company's stock dropped $6.48, or 3.7 percent, to $167.78.

Russia also remained in focus on concerns about the impact of the recent slide in the ruble. The currency has lost more than 50 percent of its value this year. After falling again early Wednesday, the ruble recovered and was 12 percent higher at 61.66 rubles to the dollar, after Russian authorities indicated that they would sell foreign currency to relieve pressure on the ruble.

The Russian currency has suffered in the wake of sliding oil prices and sanctions imposed over Russia's involvement in Ukraine's crisis.

In government bond trading, prices fell. The yield on the 10-year benchmark Treasury note, which rises when prices fall, climbed to 2.13 percent from 2.08 percent a day earlier.

The price of gold was little changed from Tuesday at $1,194.50 an ounce. Silver rose 18 cents to $15.93 an ounce, and copper rose a penny to $2.87 a pound.

In other energy futures trading on the NYMEX:

- Wholesale gasoline rose 2.5 cents to close at $1.566 a gallon.

- Heating oil rose 4.9 cents to close at $2.009 a gallon.

- Natural gas fell 8.3 cents to close at $3.702 per 1,000 cubic feet.