Stocks turned slightly higher after the Federal Reserve said it was seeing some improvement in the economy, but not enough to begin raising interest rates. The Fed's benchmark rate has remained near zero for more than six years in an effort to bolster the economy and encourage borrowing, lending and investment. Bond prices rose, sending yields slightly lower.
KEEPING SCORE: The Dow Jones industrial average was up 33 points, or 0.2 percent, as of 2:35 p.m. Eastern time, about half an hour after the Fed released its latest policy statement. The Dow was slightly lower just before. The Standard & Poor's 500 index was up three points, or 0.1 percent, to 2,098. The Nasdaq composite edged up six points, or 0.1 percent, to 5,062.
THE FED SPEAKS: The Fed said in it its statement that the economy has strengthened after a slump early in the year. However the central bank also said it plans to wait to see more gains in employment before it raises interest rates above their historically low levels. The Fed didn't provide a timetable for when it would begin raising rates, but it said it expects the economy's gains to pick up later in the year.
THE QUOTE: "This makes the market feel more confident," said Alan Rechtschaffen, financial advisor at UBS Wealth Management Americas. "What the Fed is telling you is that they're in no rush to raise interest rates right now."
BACKDROP FOR A BULL: Gains for stocks and historically low interest rates have gone hand-in-hand over the last six years. Now that dynamic may change, as the Fed appears to be moving closer to raising rates. Investors fret that if the Fed raises rates too quickly it could stifle growth.
RETURN TO SENDER: FedEx shares slumped 4 percent after the package-delivery giant reported quarterly results that were below expectations and gave a mildly disappointing outlook for the next fiscal year. The stock shed $6.81 to $175.32.
FACE LIFT: Shares in Kythera Biopharmaceuticals surged 22.2 percent on news that Botox maker Allergan has agreed to buy the California drugmaker for about $2.1 billion. The deal would add an injection that reduces "double chin" to Dublin-based Allergan's portfolio of products. Kythera jumped $13.47 to $74.19. Allergan added 99 cents to $299.01.
IN A BUYING MOOD: Medical technology company Hill-Rom Holdings climbed 7.6 percent after it agreed to buy privately held rival Welch Allyn for about $2.05 billion in a cash-and-stock deal. The stock gained $3.99 to $56.37.
EUROPEAN MARKETS: Major stock indexes in Europe moved lower as Greece remained deadlocked in talks with its creditors. There was little sign of a breakthrough a day ahead of a meeting of the 19 finance ministers from countries that use the euro.
European markets have slumped in the last month as the talks have failed to produce an agreement. Greek markets are suffering the most.
Greece's benchmark index sank 3 percent Wednesday and is down 18 percent this year. Yields on Greek government bonds have also surged as investors' confidence in the country's ability to pay its debt has waned. The yield on the Greek 10-year government bond has climbed to 13 percent from 6 percent a year ago.
ENERGY: Benchmark U.S. crude fell 10 cents to $59.84 per barrel on the New York Mercantile Exchange.
BONDS AND CURRENCIES: Bond prices rose slightly after the Fed released its statement. The yield on the 10-year Treasury note fell to 2.33 percent from 2.38 percent just before the statement was released. The euro rose to $1.1307 and the dollar edged higher against the Japanese yen, climbing to 123.64 yen.