USA Stocks lift by FED signals

NEW YORK - U.S. stocks rallied Wednesday morning, drawing strength from a higher revenue outlook from Cisco Systems Inc. as well as a Federal Reserve policy statement that indicated moderate growth should persist, even with the recent turmoil in the credit markets.

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COMP2,605.88, +44.28, +1.7% ) rose 15 points to 1,491 and 42 points to 2,604.
On Tuesday the Fed held steady on interest rates steady and retained a bias toward keeping the fight against inflation as its top priority. But the statement also made prominent reference to the credit markets' recent woes.

Investors were still in an upbeat frame of mind on Wednesday.

"The fact that the Federal Reserve mentioned the credit markets' problems in its statement is reassuring to the market," said Art Hogan, chief market strategist at Jefferies & Co. "They acknowledged that the market's worries are on their minds."
Overnight, the Reserve Bank of Australia upped its key rate by a quarter of a percentage point, to 6.5%, and said credit-market developments "to date don't appear to have changed significantly the broader global outlook."

And the Bank of England, another central bank that has raised interest rates recently, said inflation may hit its target by the end of 2008.
The government reported that wholesale inventories rose 0.5% in June, marking the second monthly gain in a row. The rise was linked to stockpiles of petroleum.
The Energy Department reported that crude supplies fell 4.1 million barrels in the latest week, while distillate supplies rose by 1 million barrels.