NEW YORK (
TheStreet) -- Markets gained ground Wednesday after the release of the much-watched minutes of the Federal Reserve's chief policy-making committee showed that the central bank is preparing to end its historic program of monetary easing as soon as October.
The Federal Open Market Committee described a sense of complacency toward risk among investors as conducive to ending a stimulus campaign started in an effort to resuscitate an economy battered by the Recession of 2008.
The Dow Jones Industrial Average added 0.5% to close at 16,985.61 while the S&P 500 similarly gained 0.5 to end the regular trading day at 1,972.83. The Nasdaq rose 0.6% to 4,419.03.
"If the economy progresses about as the Committee expects, warranting reductions in the pace of purchases at each upcoming meeting, this final reduction would occur following the October meeting," the Fed wrote in the minutes if its June 17-18 meeting. The committee has been dialing back bond purchases in $10 billion increments on signs the economy needed less stimulus.
The committee also noted declines in measures of uncertainty due to "generally favorable economic news, less uncertainty for the path of monetary policy, and complacency on the part of market participants about potential risks."July 9 Premarket Briefing: 10 Things You Should Know European Stocks Slide Ahead of Fed Minutes Stock Market Today: Dow Slips Below 17,000 Mark With Little to Re-Energize Rally Eric Green, head of U.S. rates and economic research at TD Securities, urged investors not to get caught up in the speculation that a rate hike will take place as soon as in the first half of 2015. "The Fed cannot afford to get this exit strategy wrong," Green noted. Alcoa (AA) advanced 5.7% to $15.69 after the world's third-largest aluminum producer earned 18 cents a share over the quarter, 6 cents higher than what analysts expected. Alcoa is considered a bellwether for earnings season given it is the first large-cap, high-profile company to report. S&P 500 company earnings are expected to grow 8.9% year over year, Newedge director of market strategy Robbert van Batenburg commented in a note. Earnings growth is expected to be highest in the telecommunications sector at 12% and lowest in the financial sector at -3.3%. NQ Mobile (NQ) shares gained 6.8% to $4.42 after releasing an independent study indicating it didn't engage in fraudulent conduct as research firm Muddy Waters had suggested. Reynolds American (RAI) added 2.2% after The Daily Mail reported that British American Tobacco will reportedly buy the 58% stake of Reynolds that it doesn't already own. AbbVie (ABBV) on Tuesday made its fourth offer for Irish drugmaker Shire (SHPG), this time raising the bid by 11% to about 30.1 billion pounds ($51.5 billion). Shire shares climbed 0.93%, while AbbVie slipped 1.2%. The Dow tumbled below the 17,000 psychological threshold Tuesday with little market-moving news to sustain the rally that swept benchmark indices to record highs last week. --By Keris Alison Lahiff and Andrea Tse in New York
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