NEW YORK (TheStreet) -- Stocks climbed back Wednesday after the Federal Reserve reiterated its willingness to further assist the economy, if needed.
The Dow Jones Industrial Average gained 178 points, or 1.5%, to close at 11,836, making up some of its losses from the previous session when the index lost nearly 300 points on Greece's pledge to hold a referendum vote on its bailout package.
Bank of America (BAC) led the Dow higher, rising 5%. Intel (INTC) was the only Dow component to finish in negative territory.
The S&P 500 gained 20 points, or 1.6%, to finish at 1238 and the Nasdaq closed ahead by 33 points, or 1.3%, to close at 2640.
The U.S. Federal Reserve's rate decision statement on Wednesday afternoon gave a more positive assessment of the economy, noting stronger growth and improved household spending, although the Fed said labor and housing markets remain weak.
The central bank also highlighted "significant downside risks to the economic outlook, including strains in global financial markets" as it kept interest rates unchanged and said it would continue the maturity extension that it announced in September. The Fed continues to believe that low rates are warranted at least through mid-2013.
The most remarkable aspect of the Fed's statement was the fact that it had only one dissenting vote -- from Chicago Fed President Charles Evans who wanted the Fed to do more for the economy. At the Federal Open Market Committee's previous meeting, three members dissented because they thought the central bank was being too accommodative.
Fed policymakers also lowered their growth outlook, forecasting 2012 economic growth of between 2.5% and 2.9%, compared with previous estimates for growth between 3.3% and 3.7%. The unemployment rate isn't slated to fall below a range of 8.5% to 8.7% by the end of next year, which is down from projections made in June for the unemployment rate to fall to the 7.8% to 8.2% range.
During a press conference following the FOMC rate decision statement, Fed Chairman Ben Bernanke said the central bank is regularly assessing its exposure to the European debt crisis and has the tools to provide more support to the economy, if needed.
Investors have found some relief that the economy has held up despite weakening conditions overseas. Contributing to the positive sentiment on Wednesday was a report from services firm Automatic Data Processing that showed U.S. companies added 110,000 new jobs in October, slightly better than economists expected. While hiring remains weak, particularly amongst large corporations and in the manufacturing sector, the jobs market appears to have stabilized. Companies added a revised 116,000 number of new jobs in September.
In a separate report, consulting firm Challenger Gray & Christmas said the number of layoffs planned by employers in October fell 63%. However, layoffs increased 12.6% in October compared to the same month last year.
"The bias for day traders will be to lean into equities [today]" said Mark Luschini, chief investment strategist at Janney Montgomery Scott. However, Luschini noted that ADP's jobs numbers as well as the Fed's report would not be enough to recapture what stocks have given up in the last two days.
"Although we can focus a bit on the U.S today, I don't think we can ignore the European situation, which remains fluid" added Luschini.
The surprise roadblock from Greece in the eurozone debt plan efforts continues to threaten further losses for global equities. Euro leaders are likely to put pressure on Greece to accept budget cuts as planned and have scheduled emergency talks ahead of Thursday's Group of 20 summit in France.
Nevertheless, even European markets took positive cues from Wall Street on Wednesday. London's FTSE closed up 1.1% while Germany's DAX jumped 2.4%. Overnight Asian stocks sold off, with Japan's Nikkei Average finishing 0.7% lower, and Hong Kong's Hang Seng losing 0.8%.
In corporate news, shares of electronics giant Sony (SNE)
fell 6% to $18.53 after reporting a fiscal second-quarter loss of 27 billion yen ($346 million). The Japanese firm also said it expects an annual loss for the fourth year in a row.
shares rose 1.1% to $15.10 after the Wall Street Journal
reported that the company is pitching itself to private equity firms, in hopes that they may take up a minority stake.
Satellite company Garmin (GRMN)
surged 4.5% to $35.71 after reporting better than expected third quarter results and a positive outlook for the year. Personal navigation devices bundled with traffic and mapping services has helped the company counter the threat of navigation-enabled smartphones.
jumped 7% to $357.66 after the company's third quarter profit rose 38% from increased credit and debit card transactions.
The euro gained against the greenback, which slipped 0.4% against a basket of foreign currencies. The benchmark 10-year Treasury was last slipping 1/32, lifting the yield to 1.996%.
Gold for December delivery gained $17.80, or 1%, to settle at $1711.80 an ounce. In other commodities, the December crude oil contract added 32 cents, or 0.3% to settle at $92.51 a barrel.
-- Written by Chao Deng and Melinda Peer in New York