Stocks resumed their climb back toward session highs on Wednesday after the Federal Reserve held its stance to keep borrowing costs near zero for an extended period even though it expressed confidence the U.S. economic recovery was gaining steam.
The Fed kept its benchmark federal funds rate unchanged in a range of zero to 0.25 percent, as expected, and said the economy has continued to pick up since its last policy meeting in September.
It was expected, absolutely expected. Nobody thought the Fed was going to raise interest rates, the unemployment rate is too high, there is no sense of any inflation, anywhere now or in the future, said Keith Springer, president of Capital Financial Advisory Services in Sacramento, California.
But it's a very positive statement, he added. The longer the Fed can keep interest rates low, the better it is for the economy.
The Dow Jones industrial average <.DJI> gained 140.04 points, or 1.43 percent, to 9,911.95. The Standard & Poor's 500 Index <.SPX> rose 13.67 points, or 1.31 percent, to 1,059.08. The Nasdaq Composite Index <.IXIC> added 19.63 points, or 0.95 percent, to 2,076.95.
In the moments after the Fed's statement, the three major U.S. stock indexes briefly trimmed the session's gains and then turned higher.
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)