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The stock market ended the Wednesday session with solid gains that were paced by the Russell 2000. The small-cap index jumped 3.1% while the S&P 500 settled higher by 2.0% with all ten sectors registering gains.

Equities climbed through the first half of action and saw an extension of their rally in the afternoon once the FOMC released its latest policy directive.

As expected by some, the Fed removed the "considerable time" language from its policy statement, but that reference was replaced with a call for "patience," which essentially conveyed the same message. Above all, Chair Yellen reiterated that the central bank will remain data-dependent and reserves the right to accelerate, or defer, a rate hike in accordance with what the data are communicating about the progress being made toward the Fed's dual mandate.

With regard to inflation, Ms. Yellen touched on the drop in oil prices during her press conference, but showed little concern, saying the decline is expected to be transitory.

The policy statement was followed by volatile action in the bond market, but Treasuries slid to lows into the close. The benchmark 10-yr yield spiked eight basis points to 2.14%.

As for equities, the energy sector (+4.2%) paced the advance and ended near its high even as crude oil slumped into the close, ending higher by 1.0% at $56.44/bbl.

The energy sector was followed by the materials space (+2.8%), which benefitted from gains among miners and steelmakers. The Market Vectors Gold Miners ETF (GDX 17.98, +0.88) and Market Vectors Steel ETF (SLX 35.31, +1.27) ended higher by 5.2% and 3.7%, respectively.

Outside of the two commodity-related groups, the financial sector (+2.3%) represented the only other outperformer on the cyclical side. Influential sector components fueled the strength with Bank of America (BAC 17.26, +0.54) and JPMorgan Chase (JPM 59.77, +1.34) posting respective gains of 3.2% and 2.3%.

Elsewhere, the industrial sector (+0.9%) climbed out of the red after the FOMC statement, but the sector could not keep pace with the broader market amid relative weakness in transport stocks. FedEx (FDX 167.78, -6.48) tumbled 3.7% after missing estimates while peers Expeditors International (EXPD 43.28, -0.98) and UPS (UPS 108.55, -1.28) lost 2.2% and 1.2%, respectively. However, rail carriers CSX (CSX 35.77, +1.10) and Union-Pacific (UNP 114.89, +2.69) helped the Dow Jones Transportation Average end higher by 0.9%.

Today's participation was ahead of average with more than a billion shares changing hands at the NYSE floor.

Economic data included CPI, Core CPI, Q3 Current Account, and MBA Mortgage Index:

• Consumer prices declined 0.3% in November after being unchanged in October, which was the biggest decline since CPI fell 0.8% in December 2008 
  • The consensus expected a decline of 0.1% 
  • The entire decline in prices can be attributed to the energy sector. Energy prices fell 3.8% in November, marking the fifth consecutive monthly decline and the largest drop since falling 9.5% in December 2008 
  • Gasoline prices fell 6.6% after declining 3.0% in October 
  • Food prices increased 0.2% in November, up from a 0.1% gain in October 
• Excluding food and energy, core CPI increased 0.1% in November, down from a 0.2% gain in October, while the consensus expected an increase of 0.1% 
• The current account deficit for the third quarter totaled $100.30 billion while the consensus expected the deficit to hit $95.00 billion 
  • The second quarter deficit was revised down to $98.40 billion from $98.50 billion 
• The weekly MBA Mortgage Index fell 3.3% to follow last week's 7.3% spike 

Tomorrow, weekly Initial Claims (consensus 292K) will be released at 8:30 ET while November Leading Indicators (consensus 0.5%) and the Philadelphia Fed Survey for December (consensus 26.0) will cross the wires at 10:00 ET.

• Nasdaq Composite +11.2% YTD 
• S&P 500 +8.9% YTD 
• Dow Jones Industrial Average +4.7% YTD 
• Russell 2000 +0.9% YTD

Economic Data Summary:

• Weekly MBA Mortgage Applications -3.3% vs consensus of ; Last Week was 7.3%
• November CPI -0.3% vs consensus of -0.1%; October was 0.0%
• November Core CPI 0.1% vs consensus of 0.1%; October was 0.2%
• • The entire decline in prices can be attributed to the energy sector. Energy prices fell 3.8% in November, marking the fifth consecutive monthly decline and the largest drop since falling 9.5% in December 2008. Gasoline prices fell 6.6% after declining 3.0% in October.
    
• Third Quarter Current Account Balance -$100.3 bln vs consensus of -$95.0 bln; Second Quarter was revised to -$98.4 bln from -$98.5 bln

Fed/Treasury Events Summary:

• Fed Keeps 'Considerable Time Language":  Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy....the Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.
  
• 3 Members dissented:
• • Dallas Fed President Fisher, a noted hawk, dissented on the belief that U.S. economic performance since October has moved forward since October, more than the majority of the Committee envisions, the date when it will likely be appropriate to increase the federal funds rate. 
  • Philadelphia Fed President Plosser, another noted hawk, dissented on the grounds that the statement should not stress the importance of the passage of time as a key element of its forward guidance and that it should not emphasize the consistency of the current forward guidance with previous statements given the improvement in economic conditions.
  • Minneapolis Fed President Kocherlakota, a noted dove, thought the Committee's decision created undue downside risk to the credibility of the 2 percent inflation target. 
    
• Fed Chair Janet Yellen Press Conference- Yellen said unlikely to begin normalization process for the next couple of meetings (remains data dependent). If inflation continues to run below the 2% inflation rate goal, it could hold rates lower for a considerable amount of time... with Asset purchase program wound down in October, it seemed less meaningful to reference a rate increase that is based on even in the past; new language focuses on data dependency.
  

Upcoming Economic Data:

• Weekly Initial Claims due out Thursday at 8:30 (Briefing.com consensus of 292K; Last Week was 294K)
• Weekly Continuing Claims due out Thursday at 8:30 (consensus of 2.510 M ; Last Week was 2.514 M )
• December Philadelphia Fed due out Thursday at 10:00 (consensus of 26.0; November was 40.8)
• November Leading Indicators due out Thursday at 10:00 (consensus of 0.5%; October was 0.9%)