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."

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