Stocks advance as Fed plans to continue bond-buying program

Stock prices held on to early gains Wednesday and were little impacted by comments from Federal Reserve Board chairman Ben Bernanke.

The Dow Jones Industrial Average gained 55.91 points to 14,511.73, just short of a record close. The Nasdaq composite index was up 25.09 points to 3,254.19 and the S&P 500 stock index added 10.37 points to 1,558.71.

The Fed concluded its two-day meeting saying the economy has been experiencing growth but still struggles with "elevated unemployment."

Investors will get a large dose of economic news Thursday with the weekly jobs report, existing home sales for February, and the index of leading economic indicators from the Conference Board.

“The Fed essentially did what’s to be expected, which is to reinforce that the economy still needs support,” said Hank Herrmann, Overland Park, Kan.-based chief executive officer of Waddell & Reed Investment Management Co. His firm manages $103 billion.

“Cyprus just reminds us all (of) the fragility of the economic circumstances in Europe," Herrmann said. "As you look at the economic data, pretty much everywhere outside the U.S. has been equally unconvincing in terms of any kind of expansion.”

More than three years into the expansion, the central bank led by Bernanke is pressing on with open-ended purchases of Treasury and mortgage securities to boost the pace of growth and heal a labor market still scarred by the deepest recession since the Great Depression.

The S&P 500 has surged 130 percent from a 12-year low in 2009 as companies reported better-than-estimated earnings and the Fed embarked on three rounds of bond purchases to stimulate the economy. The benchmark index rose to within two points of its 2007 record last week while the Dow hit an all-time high.

The Federal Open Market Committee, at the conclusion of a two-day meeting in Washington, left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation is projected to be no more than 2.5 percent.

Stocks rallied earlier Wednesday as euro-area leaders weighed options for Cyprus. Investors speculated that the European Central Bank will continue to support the country’s banks until next week, after lawmakers in the Mediterranean nation rejected an unprecedented levy on bank deposits.

“In a lot of ways, what’s happening in Cyprus only serves to reinforce the Fed’s current policy,” said Richard Helm, a portfolio manager at New York-based Cohen & Steers, which oversees more than $40 billion, in a phone interview. “It puts to bed that the Fed might raise rates sooner than later if you do have issues re-emerging in Europe.”

Lennar Corp. (NYSE: LEN) jumped 4.8 percent to $43.40. The third-biggest U.S. homebuilder by revenue said earnings rose in the fiscal first quarter as prices and sales increased amid the broadening national housing recovery.

Toll Brothers Inc. (NYSE: TOL), the largest U.S. luxury-home builder, added 5.9 percent to $36.53. Orders are up 49 percent for the spring, Chief Executive Officer Douglas Yearley said Wednesday.

Alaska Air Group Inc. (NYSE: ALK) surged 3.4 percent to a record $63, while Delta Air Lines Inc. (NYSE: DAL) jumped 3.2 percent to $17.07. U.S. Airways Group (NYSE: LCC) added 2.7 percent to $17.23, the highest level since 2007.

Adobe Systems Inc. (Nasdaq: ADBE) gained 4.2 percent to $42.46, as the maker of Photoshop software reported sales for the quarter ended March 1 of $1.01 billion, beating the average analyst estimate of $985.8 million. Profit excluding some items was 35 cents a share, exceeding the average analyst projection of 31 cents.

BlackBerry (Nasdaq: BBRY), formerly Research In Motion Ltd., increased 6.5 percent to $16. Morgan Stanley (NYSE: MS) raised its rating on the Canadian-based phone company to overweight from underweight. The BlackBerry 10 device may boost gross margins and average selling prices, Morgan Stanley analyst Ehud Gelblum said in a note.

Oracle Corp. (Nasdaq: ORCL) tumbled 7.5 percent to $33.10. The company posted fiscal third-quarter sales and profit that missed analysts’ estimates as customers chose competitors’ Web-based software.

Cintas Corp. (Nasdaq: CTAS) dropped 4.5 percent to $43.88 after the provider of restroom supplies and entrance mats said it expects full-year earnings per share of $2.50 to $2.54. That compares with a previous forecast of $2.50 to $2.58.