Dow Closes at Record After Fed Keeps Rates Intact

NEW YORK (AP) -

The stock market got the reassurance it wanted from the Federal Reserve Wednesday.

The U.S. central bank signaled that it would keep its short-term interest rate near zero for a while yet, and investors pushed the Dow Jones industrial average to a record high. Low rates have been a boon to the market by helping stimulate the economy and making stocks a more attractive investment than bonds.

Major indexes drifted before the Fed released a statement at 2 p.m. Eastern time signaling little change in its interest rate policy. Stocks in all three U.S. major indexes rose. The gains were small, but broad. Seven of the 10 industry groups of the Standard & Poor’s 500 index rose, led by materials stocks.

In its statement following a two-day policy meeting, the central bank retained language that it plans to keep short-term rates at a record low for “a considerable time” after it ends its monthly bond purchases in November.

The Dow gained 24.88 points, or 0.2 percent, to end at 17,156.85 — its 16th record high this year. The S&P 500 edged up 2.59 points, or 0.1 percent, to 2,001.57, falling short of its own closing high of 2,007.71 from Sept. 5.

The Nasdaq composite finished higher by 9.43 points, or 0.2 percent, to 4,562.19, still well below its dot-com era peak.

Shares of home builders jumped after an index of builder confidence for new homes rose to its highest level in nearly nine years. Lennar Corp. rose nearly 6 percent, the most in the S&P 500 index.

The S&P 500 has risen 8 percent in 2014, extending the bull market into a sixth year. Companies have been hiring at a solid pace and manufacturing and construction have picked up.

In government bond trading, the yield on the 10-year Treasury note edged up to 2.62 percent, from 2.59 percent late Tuesday. The yield has moved between a high of 3 percent and a low of 2.34 percent this year.

Oil fell after the Energy Department reported an unexpected increase in U.S. crude oil supplies. Benchmark U.S. oil fell 46 cents to $94.42 a barrel. Brent crude, a benchmark for international oils imported by many U.S. refineries, dropped 8 cents to $98.97 a barrel in London. Inventories of U.S. crude oil rose by 3.7 million barrels last week.

In other energy futures, wholesale gasoline rose 1 cent to $2.569 a gallon. Heating oil fell 1.1 cents to $2.745 a gallon. Natural gas gained 1.8 cents to $4.013 per 1,000 cubic feet.

Gold, which was flat minutes before the Fed news on interest rates, ended down 80 cents, or 0.1 percent, to $1,235.90 an ounce. Silver rose 1.3 cents, or 0.1 percent, to $18.73 an ounce. Copper fell 2.3 cents, or 0.7 percent, to $3.14 a pound.

Among stocks making big moves:

— DuPont surged $3.42 to $69.25, or 5.2 percent, the biggest gain in the Dow by far. Investors bought the stock on news that activist investor Nelson Peltz had sent a letter to the company’s board suggesting it split in two. His Trian Fund Management LP said it has been in private talks with DuPont for more than a year to boost shareholder value and improve its financial performance.

— FedEx rose $5.05, or 3 percent, to $159.71 after its quarterly profit beat forecasts by financial analysts.

— General Mills, makers of Cheerios cereal and Yoplait yogurt, fell $2.35, or 4.4 percent, to $50.83 after reporting poor quarterly results. Its stock was the third-biggest loser in the S&P 500.