NEW YORK (TheStreet) -- Stocks recovered, turning higher shortly after the Federal Reserve kept rates unchanged at its meeting on Wednesday.

However, though the economy appears to be improving, Fed Chair Janet Yellen still sees remaining weakness in the labor market. In a press conference, Yellen said participation remains too low and subdued wage growth persists. 

The S&P 500 was up 0.17%, the Dow Jones Industrial Average added 0.2%, and the Nasdaq gained 0.2%.

The Fed kept rates steady at near-zero crises levels following its June meeting, though signaled it is prepared to move later this year, according to a press release. The Fed also increased its 2016 GDP growth estimate to between 2.4% and 2.7%, up from expectations for 2.3% to 2.7% in March.

Members also saw an improvement in the economy since the slow start to the year, though downgraded their annual GDP forecast in light of first-quarter weakness. The central bank expects the economy to grow 1.8% to 2% in 2015, down from a previous forecast of 2.3% to 2.7%. 

"Information received since the Federal Open Market Committee met in April suggests that economic activity has been expanding moderately after having changed little during the first quarter," the central bank said in a statement. 

The Fed's dot-point graph suggested two quarter-point rate hikes in 2015 and a slower pace of hikes through 2016 and 2017. 

"If one believes, as we do, that the Fed is getting set to hike later this year, the Fed's dot plot plays right into that thesis," said Dan Greenhaus, chief strategist at BTIG Research. "The statement does use 'moderate' or 'moderately' three separate times, reinforcing the Fed's hesitancy and nervousness about the outlook. But we think they want to raise rates and the projections support that idea."

The majority of economists didn't expect the Fed to raise rates at this meeting. Of 79 economists surveyed by Bloomberg, only one expected a hike of 25 basis points at this meeting.

AT&T (T) shares were slightly lower on reports the Federal Communications Commission will fine the telecom $100 million for allegedly misleading customers about unlimited mobile data plans, according to Bloomberg.  

FedEx (FDX) shares dropped more than 2% after the delivery company reported a mixed fourth quarter and falling operating margins. The company earned $2.66 a share on an adjusted basis, 2 cents below estimates, while revenue of $12.1 billion missed estimates by $210 million.

Adobe Systems (ADBE) slipped 1.3% after reporting second-quarter earnings of 48 cents a share, 3 cents higher than expected. The software developer reported revenue of $1.16 billion, 8.4% higher than a year ago and in-line with estimates. The company's outlook for the third quarter, however, was weak.

ATM manufacturer NCR (NCR) was giving back some of the gains achieved on Tuesday's session after reports Blackstone Group (BX) and Carlyle Group (CG) were preparing to make a joint bid. The buyout would be valued at more than $10 billion, including debt.

Kythera Biopharmaceuticals (KYTH) rocketed 22.4% higher after Allergan (AGN) announced it would buy the biotech company in a deal worth $75 a share, or $2.1 billion.

Starbucks (SBUX) has announced it will close all 23 of its La Boulange bakery cafes by the end of September. The coffee house chain acquired the locations as part of an acquisition in 2012.

Bob Evans Farms (BOBE) moved higher after reporting a 2.1% increase in same-store sales in its fourth quarter. The company reported net income of 56 cents a share, 15 cents above estimates, while revenue of $332.39 million climbed 1.8%.

21st Century Fox (FOXA) shares were on watch after the company confirmed James Murdoch will replace founder and father Rupert Murdoch as CEO of the media conglomerate beginning July 1. Chase Carey, president and chief operating officer, will become executive vice chairman through to June 2016.

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