Investing.com - U.S. stocks finished Wednesday higher after the Federal Reserve concluded its March monetary policy meeting stating that interest rates will remain unchanged and monetary policy loose.
At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.39%, the S&P 500 index ended up 0.67%, while the Nasdaq Composite index rose 0.78%.
The Fed said earlier after its March monetary policy meeting concluded that it was keeping interest rates near zero and added it was making no changes to its USD85 billion monthly bond-buying program, which weakens the greenback by flooding the economy with liquidity to encourage investing and hiring.
Stock prices climb as a side effect under such policies.
Meanwhile, Federal Reserve language suggesting that mandatory budget cuts kicking in were offsetting improvements taking place elsewhere in the U.S. economy added to sentiments that the Fed will continue pumping liquidity into the economy for now.
"Labor market conditions have shown signs of improvement in recent months but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy has become somewhat more restrictive," the Federal Reserve said in a statement.
"Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable."
Stock markets largely looked past problems in Cyprus.
Cyprus's parliament on Tuesday rejected calls to tax banking accounts holding at least EUR20,000 to help come up with EUR5.8 billion needed to qualify the country for a EUR10 billion multilateral bailout package.
Fears that such a move may cut off access to bailout money began to wane by Wednesday, as hopes began to build Cyprus may seek help elsewhere, possibly in Russia, home to a sizeable portion of depositors in Cypriot banks.
Leading Dow Jones Industrial Average performers included Coca-Cola, up 1.35%, American Express, also up 1.35%, and Walt Disney, up 1.08%.
The Dow Jones Industrial Average's worst performers included Caterpillar, down 1.54%, Hewlett-Packard, down 0.87%, and Verizon Communications, down 0.74%.
European indices, meanwhile, finished largely higher.
After the close of European trade, the EURO STOXX 50 rose 1.38%, France's CAC 40 rose 1.43%, while Germany's DAX 30 finished up 0.68%. Meanwhile, in the U.K. the FTSE 100 finished down 0.13%.
On Thursday, the U.S. is to release the weekly government report on initial jobless claims, as well as industry data on existing home sales and official data on manufacturing activity in Philadelphia.
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