US STOCKS-Wall Street jumps on Fed's corporate bond purchase announcement

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* Fed announces indexing approach to SMCCF program
* Moderna up on report Israel in talks to buy its vaccine
* Indexes up: Dow 0.95%, S&P 1.16%, Nasdaq 1.69%

(Updates to late afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, June 15 (Reuters) - Wall Street jumped on Monday
following an announcement by the U.S. Federal Reserve regarding
its corporate bond purchasing program that boosted investor
confidence, which had been wavering amid a spike in new COVID-19
cases.
All three major U.S. stock indexes abruptly reversed earlier
losses in afternoon trading, following the Fed's decision to
apply an indexing approach to its secondary market corporate
credit facility to create a more diversified portfolio.
"It makes sense that we'd rally (following the Fed
announcement)," said Oliver Pursche, president and CIO of
Bronson Meadows Capital Management in Fairfield, Connecticut.
"But the market is probably overshot, considering what the
reaction should be."
"To a large extent it was expected," Pursche added.
A flood of liquidity in the form of fiscal and economic
stimulus, along with uneven but steady re-openings of state and
local economies, sparked a remarkable rally in the stock market
since its late-March trough.
But surging new cases of COVID-19 in China, where the
pandemic originated, prompted the reintroduction of containment
measures, and record hospitalizations in several U.S. states
dampened investor risk appetite. On the flipside, an uptick in China's factory output and a
much better-than-expected Empire State manufacturing report gave
evidence that the pandemic-hobbled global economy was on the
road to recovery. Earlier, the U.S. Federal Reserve announced it had opened
registration for its Main Street Lending program to help
businesses weather the storm of mandated lockdowns. Last week, the Fed provided its first pandemic era outlook,
and market participants will be closely following Chair Jerome
Powell's testimony before Congress for details on the central
bank's somber economic projections.
"You've gone through an enormous amount of pain and the
healing will take some time," Pursche added. "The patient got
very sick and is on the road to recovery but it's a long road."
The Dow Jones Industrial Average .DJI rose 243.16 points,
or 0.95%, to 25,848.7, the S&P 500 .SPX gained 35.27 points,
or 1.16%, to 3,076.58 and the Nasdaq Composite .IXIC added
161.76 points, or 1.69%, to 9,750.57.
All 11 major sectors of the S&P 500 were trading higher,
with industrials .SPLRCI and financials .SPNY enjoying the
largest percentage gains.
Drugmaker Moderna Inc MRNA.O gained 6.0% following a
report that Israel is in advanced talks to buy its coronavirus
vaccine. Advancing issues outnumbered declining ones on the NYSE by a
2.01-to-1 ratio; on Nasdaq, a 2.89-to-1 ratio favored advancers.
The S&P 500 posted no new 52-week highs and no new lows; the
Nasdaq Composite recorded 36 new highs and 10 new lows.

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