Stocks rise; Fed stands by stimulus

Fear of a revived debt crisis in Europe faded from the stock market Wednesday, freeing the Dow Jones Industrial Average to briefly touch an all-time high.

After dipping Monday on concerns that Cyprus would become the latest European nation to stir fiscal chaos, the Dow posted its second straight day of gains.

Stocks traded steadily higher for most of the day and spiked after the Federal Reserve said it will continue with aggressive measures to boost the economy. Fed Chairman Ben Bernanke said the Cyprus crisis posed no major risk to the U.S. economy.

The Dow closed up 55.91 points Wednesday, or 0.4 percent, to 14,511.73.

The Standard & Poor’s 500 index rose 10.37 points, or 0.7 percent, to 1,558.71. The Nasdaq composite index rose 25.09, or 0.8 percent, to 3,254.19.

The S&P 500 is just six points below its all-time high of 1,565, reached in October 2007. It is up 9.3 percent so far this year.

The Dow is up 10.7 percent for the year.

The Fed said the U.S. economy has strengthened after pausing late last year, but still needs support from the central bank. The Fed plans to continue buying $85 billion in bonds per month indefinitely to keep long-term borrowing costs down and spur investment. It also said it would keep short-term interest rates at record lows, at least until unemployment falls to 6.5 percent.

Unemployment fell last month to 7.7 percent, the lowest in four years. The Fed doesn’t expect the rate to reach its target until 2015.

Stock markets were little changed Tuesday despite rising uncertainty in Cyprus. Anyone watching “would conclude that the market decided Cyprus is overblown as an issue,” said Brian Gendreau, a strategist at Cetera Financial Group.

“I think the market’s going to start looking at other things,” he said.

In other news:

FEDEX: The shipping company reported sharply lower quarterly earnings and said it will cut capacity to Asia. FedEx is seen as a bellwether for the broader economy because air shipments are tied closely to the pace of business activity.

FedEx sank $7.33, or 6.9 percent, to $99.13.

ADOBE: It soared after reporting strong first-quarter earnings. The company, which makes Adobe Reader and Photoshop, said it has picked up more subscriptions to online versions of its software products. The stock rose $1.71, or 4.2 percent, to $42.46.

GENERAL MILLS: It rose $1.19, or 2.6 percent, to $47.61 after saying its fiscal third-quarter profit rose 2 percent. The food company is benefiting from recent acquisitions.

WILLIAMS-SONOMA: It soared after the home goods retailer said its fourth-quarter net income jumped 9 percent and beat expectations. The stock rose $4.64, or 10.3 percent, to $49.85.

AIRLINES: The global airline industry predicts a modest improvement in global profit for 2013, crediting a backdrop of rising optimism about the world’s economy, particularly in the United States and Europe. The International Air Transport Association expects profit of $10.6 billion this year due to more passengers and cargo, up from a December prediction of $8.4 billion.

AVASTIN: The Food and Drug Administration is warning doctors that a compounding pharmacy is recalling syringes of the Roche drug after receiving reports of eye infections among patients.

DEUTSCHE BANK: The German bank cuts its 2012 profit because of new charges for possible costs from mortgage-related lawsuits in the U.S.

AMERICAN REALTY CAPITAL: The real estate investment trust made a $5.74 billion cash-and-stock bid for another REIT, Cole Credit Property Trust.