Wall Street to open higher on Feds gradual rate hike outlook

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U.S. stocks looked set to open higher on Thursday, building on a day-earlier rally after the Federal Reserve raised interest rates for the first time this year and indicated it was in no hurry to increase the pace of tightening. The central bank on Wednesday raised rates by a quarter point to 0.75-1.00 percent, nodding to the continued strength in the labor market and a pick up in inflation. However, the Fed stuck to its outlook for two more rate hikes this year and three more in 2018. Shares of big U.S. banks, which slipped on the less hawkish-than-expected stance on Wednesday, were up between 0.5 and 1.5 percent in premarket trading. "A less aggressive Fed was clearly the message the markets wanted to hear and indeed acted accordingly," Peter Cardillo, chief market economist at First Standard Financial wrote in a note. "The Fed's plan to stick to three rate hikes gave the green light for investors to focus on economic and corporate growth."

Backing Fed Chair Janet Yellen's optimism on the economy, a report from the Commerce Department showed homebuilding jumped in February as unseasonably warm weather boosted construction of single-family houses. Moreover, the number of Americans filing for unemployment benefits fell last week, pointing to a further tightening in the labor market, according to a report from the Labor Department. Dow e-minis 1YMc1 were up 59 points, or 0.28 percent at 8:30 a.m. ET (1230 GMT), with 7,893 contracts changing hands.

S&P 500 e-minis ESc1 were up 2.75 points, or 0.12 percent, with 53,199 contracts traded. Nasdaq 100 e-minis NQc1 were up 9.5 points, or 0.18 percent, on volume of 6,104 contracts.

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