Stocks End With Modest Gains

Updated from 4:24 p.m. EDT

Stocks in the U.S. took a wild ride Tuesday, but they ultimately ended only moderately higher as traders digested a Federal Reserve policy statement that indicated the bank is holding firm in its inflation views.

The Dow Jones Industrial Average rose by 35.32 points, or 0.26%, to 13,504.30. The index had fallen by as many as 121 points and then leaped by as many as 139 points after the Fed's 2:15 p.m. EDT announcement.

The S&P 500 rose 9.04 points, or 0.62%, to 1476.71, while the Nasdaq Composite climbed 14.27 points, or 0.56%, to 2561.60.

The Federal Reserve Open Market Committee, as expected, kept its fed funds target rate at 5.25% for the ninth straight meeting. The only alteration in the Fed's statement was the addition of comments on the recent credit crisis.

"Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing," read the statement.

Traders had been hoping that the Fed would take the credit-market troubles into account in its statement, but they also were seeking signs that the debt woes would lead policymakers to cut rates in the near future.

But the Fed maintained that inflation is a main concern, saying that "a sustained moderation in inflation pressures has yet to be convincingly demonstrated." That echoed comments from the previous statement in late June, and doesn't leave much room for a rate cut.

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