Updated from 4:31 p.m. EDT

Stocks in New York closed more than 2% higher Wednesday as an upgrade stoked financials and the U.S. central bank did nothing to derail the upward momentum in the afternoon.

The Dow Jones Industrial Average, which reached its highest level in more than two months, climbed 168.78 points, or 2.1%, to 8185.73, and the S&P 500 gained 18.48 points, or 2.2%, to 873.64. The Nasdaq rose 38.13 points, or 2.3%, to 1711.94.

Worries about swine flu appeared to be dissipating a bit on Wall Street, and banks were stronger after positive comments from analysts at Fox-Pitt Kelton Cochran Caronia Waller. Bank of America ( BAC) gained 6.5% to $8.68, Citigroup ( C) added 8% to $3.12, and JPMorgan Chase ( JPM) rose 5.2% to $34.48 on the Dow.

The major indices rose steadily throughout the day ahead of the Federal Reserve's third monetary policymaking committee meeting of the year. The Fed announced at 2:15 p.m. EDT that its key interest rate will remain at the previously established record low range of 0% to 0.25%, as expected.

The Federal Open Market Committee also said that information received since its last meeting indicates the economy has continued to contract, but at a somewhat slower pace.

"Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time," according to the release. "Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability."

If you liked this article you might like

How to Make Your Life Successful Just Like Billionaire Warren Buffett

How to Eat Lunch With Billionaire Warren Buffett

Fed Pares $4.5 Trillion Balance Sheet But Easy-Money Era Isn't Over

Bank Stocks Move Higher as Fed Decides to Start Unwinding Balance Sheet

How to Invest Like Billionaire Warren Buffett