By ALEX VEIGA
The Federal Reserve's latest economic update reversed a listless slide for stocks Wednesday, propelling the Standard & Poor's 500 index to another record-high close.
The central bank's statement reassure investors on two fronts: The Fed sees improvement in the U.S. job market and signs of just modest inflation, but it also intends to continue keeping short-term interest rates low, a policy that's helped make stocks more attractive.
The market had been in a wait-and-see mode in advance of the Fed statement, drifting lower for much of the day. The afternoon rebound gave the stock market its fourth consecutive gain."The important thing is that the Federal Reserve has acknowledged that the unemployment rate seems to be coming down just a little bit faster than they expected," said David Kelly, chief global strategist at J.P. Morgan Funds. Major U.S. stock indexes were mostly flat in premarket trading Wednesday. They wavered through much of the morning then settled slightly in the red, where they held right up to the release of the Federal Reserve's statement at 2:00 p.m. Eastern Time. Stock investors appeared pleased with the Fed's message that rates would remain low. That sent indexes up more than half a percentage point. The Standard & Poor's 500 index rose 14.99 points, or 0.8 percent, to 1,956.98, a record close. The most recent all-time high was 1,951.27 set early last week. The Dow Jones industrial average added 98.13 points, or 0.6 percent, to 16,906.62. The Nasdaq composite gained 25.60 points, or 0.6 percent, to 4,362.84. The three indexes are all up for the year. The Fed expects the U.S. economy to grow just 2.1 percent to 2.3 percent this year, down from 2.8 percent to 3 percent in its last projections released in March. At a news conference Wednesday, Fed Chair Janet Yellen said that despite a steadily improving job market and signs of creeping inflation, the Fed sees no need to raise short-term interest rates from record lows anytime soon.