NEW YORK (Reuters) - Stocks rallied sharply late Wednesday afternoon, after the Federal Reserve slashed interest rates and amid signs that the myriad of central bank and government efforts to shore up credit markets were beginning to work.

Trading had been volatile after the Fed's big interest- rate cut, the latest in a series of moves to keep the credit crisis from triggering a deep recession.

"Some of the programs the Fed has been putting in have been helping the market," said Bobby Harrington, head of block trading at UBS in Stamford, Connecticut.

He said the so-called forced selling by hedge funds to raise cash to pay back clients was slowing and that pension funds were buying stocks to rebalance their portfolios.

"There is a window of opportunity here to build off yesterday's rally -- things got beaten up pretty bad recently and there are some decent opportunities."

The Dow Jones industrial average <.DJI> jumped 234.16 points, or 2.58 percent, to 9,299.28, near its session high at 9,351.77. The Standard & Poor's 500 Index <.SPX> climbed 24.09 points, or 2.56 percent, to 964.35, also near its session high at 969.81. The Nasdaq Composite Index <.IXIC> advanced 46.19 points, or 2.80 percent, to 1,695.66, near its session high of 1,705.51.

(Reporting by Kristina Cooke; Editing by Jan Paschal)