Wall Street Up Ahead Of Fed Statement, Eyes On Cyprus
The Dow industrials hit a record intraday high on Wednesday as U.S. stocks resumed their rise ahead of a statement from the Federal Reserve expected to reinforce the view that the Fed will keep a floor under the economy.
The Fed looks set to sustain its $85 billion monthly bond-buying stimulus despite improving U.S. economic data as the threat of a financial meltdown in Cyprus and its possible impact on the euro zone remind officials of a risky global environment.
The Fed will release the Federal Open Market Committee statement and the Summary of Economic Projections at 2 p.m. (1800 GMT). Federal Reserve Chairman Ben Bernanke will host a news conference around 2:30 p.m.
"We're not expecting any changes" in Fed policy, said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.
The housing sector's stocks ranked among the best performers after Lennar Corp (LEN.N) reported a first-quarter profit well above analysts' expectations as lower interest rates and rising rents increased home sales.
Lennar's stock rose 4.7 percent to $43.38 after hitting $43.24, its highest level since June 2007. The PHLX housing sector index .HGX jumped 2 percent.
The Dow Jones industrial average .DJI rose 54.55 points or 0.38 percent, to 14,510.37. The S&P 500 .SPX gained 7.83 points or 0.51 percent, to 1,556.17. The Nasdaq Composite .IXIC added 14.42 points or 0.45 percent, to 3,243.52.
Earlier, the Dow climbed to a record intraday high of 14,545.21.
The S&P 500 has ended lower for the past three sessions as investors sold equities to book profits from a recent rally. It is still on track to post its best quarter in a year and less than 1 percent away from a record closing high.
Cypriot leaders held crisis talks on Wednesday to avoid a financial meltdown after the country's parliament rejected a tax on bank deposits proposed over the weekend by European Union officials.
Investors fear a collapse of the banking system in Cyprus will tighten credit across Europe and become another hurdle in the region's bumpy road out of economic crisis.
"There's global relief the Cypriot situation doesn't appear to be as bad as it looked on Sunday night," said D.A. Davidson's Dickson.
Shares of General Mills (GIS.N), the U.S. maker of Yoplait yogurt, Cheerios cereal and Progresso soups, surged to a record intraday high at $47.86 after the company reported a higher quarterly profit on Wednesday. General Mills' results were helped by its recent acquisitions of Yoki Alimentos in Brazil and Yoplait Canada. At midday, the stock was up 3 percent at $47.79.
In contrast, shares of FedEx Corp (FDX.N) lost 5.6 percent - their largest percentage drop for any day since late September 2011 - to $100.53. FedEx cut its full-year forecast after reporting a 31 percent drop in quarterly profit due to restructuring costs and weakness in its air freight express business.
The Dow Jones Transportation Average .DJT slipped 0.6 percent, weighed down by FedEx, one of its components.