U.S. stocks climbed Wednesday, with the S&P 500 snapping its first three-day losing run this year, after the Federal Reserve said it would continue to support the U.S. economy.
After rallying 91 points to a new intraday high of 14,546.82, which also lifted it above its all-time closing peak of 14,539.14, the Dow Jones Industrial Average finished at 14,511.73, up 55.91 points, or 0.4%.
The S&P 500 index added 10.37 points, or 0.7%, to 1,558.71, leaving it 6.44 points from its all-time closing high, hit in October 2007. Consumer companies led the gains among its 10 major industry groups.
The Federal Reserve maintained its policies on bond purchases and record-low interest rates, projecting “a return to moderate economic growth following a pause late last year.”
“There is a safety net called the Fed that is under the market now, and when that is taken away, the market could run into some white water, but we think that comes later this year,” said Jim Russell, senior equity strategist for U.S. Bank Wealth Management in Cincinnati.
At his news conference, Federal Reserve Chairman Ben Bernanke said he did not find anything out of line with the stock market’s climb, citing growing optimism about the economy.
“Our target this year for the S&P is 1,625, so there’s a 5% upside from yesterday’s close. We don’t think it’s going to be a straight line up, there will be volatility, but we are cautiously optimistic,” David Allon, a senior financial professional at FirsTrust Financial Resources LLC.
“This directly aligns with what Bernanke said today. He said that with unemployment elevated, the sequester as well as the elimination of the payroll-tax deduction, these factors are major fiscal drags on the economy, and the Fed is working with that in mind,” Allon added.
The Nasdaq Composite Index climbed 25.09 points, or 0.8%, to 3,254.18.
For every stock that fell, nearly three gained on the New York Stock Exchange, where almost 673 million shares traded.
Composite volume cleared 3.3 billion.
FedEx Corp. shares slumped 6.9% after the economic bellwether reduced its 2013 earnings forecast as more customers resorted to less costly options.
Adobe Systems Inc. gained 4.2% after the software maker reported sales and profit that topped expectations.
A key factor for Wall Street as it moves into the second quarter is the pace and timing of the Fed’s backing away from its $85 billion a month quantitative-easing commitment.
Europe also remains a factor for markets, with an updated proposal that sought to soften a controversial tax on bank deposits in Cyprus outright rejected by the island nation’s parliament on Tuesday. Read MarketWatch’s live stream on Cyprus.
The European Central Bank said it would provide liquidity to Cyprus, where banks are closed until Tuesday, giving the European Union more time to get the upper hand on a rescue. Here’s what could happen next with Cyprus.
On the New York Mercantile Exchange, gold futures fell and oil prices gained, with the former off $3.80, or 0.2%, to 1,607.50 an ounce and the latter rising 80 cents, or 0.9%, to $92.96 a barrel.