* Fed sees three rate hikes in 2017
* Yahoo falls after disclosing largest security breach in history
* Nov consumer price index up 0.2 pct vs 0.4 pct gain in October
* Indexes up: Dow 0.18 pct, S&P 0.13 pct, Nasdaq 0.15 pct (Updates to open)
By Tanya Agrawal
Dec 15 (Reuters) - Wall Street was higher on Thursday, helped by a rise in bank stocks, a day after the Federal Reserve increased interest rates for the first time this year and signaled a faster pace of hikes in 2017.
The Fed sees three rate hikes next year instead of the two foreseen as of September, partly as a result of the changes anticipated under President-elect Donald Trump.
Fed Chair Janet Yellen also cited an improving labor market and evidence of faster inflation for its 2017 rate outlook.
The central bank’s decision to raise rates comes as Trump, who will be sworn in next month, is expected to cut taxes and boost spending on infrastructure.
“While there still remains a cloud of uncertainty over how economic policy may change under Trump’s presidency, the same rising optimism towards Trump boosting U.S. growth through tax cuts and infrastructure spending may have played a key part in the changes to the Fed’s projections,” said Lukman Otunuga, a research analyst with FXTM.
Since the Nov. 8 U.S. presidential election, stocks have rallied on bets that Trump’s expected business friendly policies will stimulate the economy.
At 9:44 a.m. ET (1444 GMT) the Dow Jones Industrial average was up 35.94 points, or 0.18 percent, at 19,828.47.
The S&P 500 was up 3.07 points, or 0.13 percent, at 2,256.35.
The Nasdaq Composite was up 8.16 points, or 0.15 percent, at 5,444.83.
Five of the 11 major S&P sectors were higher, with the financial index’s 0.92 percent rise leading the gainers.
Goldman Sachs, JPMorgan and Wells Fargo were up between 1.2-2.1 percent, boosting the S&P and the Dow.
U.S. stocks fell the most in two months on Wednesday after the central bank’s hawkish stance took some investors by surprise and crude oil tumbled.
U.S. consumer prices moderated in November, but the underlying trend continued to point to firming inflation pressures. The Labor Department said its Consumer Price Index rose 0.2 percent last month. The index had advanced 0.4 percent in October.
Mondelez was up 3.1 percent at $44.16 after reports that Kraft Heinz may buy the Cadbury chocolate maker. Kraft rose marginally to $84.51.
Eli Lilly was up 3.9 percent at $70.35 after the drugmaker forecast 2017 earnings and revenue above analysts’ estimates.
Yahoo fell 2.8 percent to $39.76 after the largest security breach in history. The company said data from more than 1 billion accounts was compromised in August 2013.
Declining issues outnumbered advancers on the NYSE by 1,748 to 947. On the Nasdaq, 1,213 issues fell and 1,112 advanced.
The S&P 500 index showed six new 52-week highs and no new lows, while the Nasdaq recorded 26 new highs and 21 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D‘Silva)