NEW YORK (AP) — The stock market rose Wednesday after the Federal Reserve told investors to expect low interest rates for a while yet, pushing the Dow Jones industrial average to a record high.
After drifting along for most of the day, stocks marched higher after the U.S. central bank released a statement signaling little change in its interest rate policy. The gains were broad, with seven of the 10 industry groups of the Standard & Poor’s 500 index rising, led by materials stocks.
The Fed statement put to rest an anxious waiting game among investors that has left the S&P 500 moving between small gains and losses for weeks. A rise in the short-term rates that the Fed controls has triggered stock drops in the past.
“The Fed is not going to take the punch bowl away,” said Brad McMillan, chief investment officer for Commonwealth Financial. “They didn’t want to spook the market.”
In its statement, the central bank retained language in that it plans to keep short-term rates low “for a considerable time” after it ends its monthly bond purchases in November. Many investors interpreted that to mean the first hike won’t come until the middle of next year.
The Dow rose 24.88 points, or 0.2 percent, to end at 17,156.85 — its 16th record high this year. The S&P 500 edged up 2.59 points, or 0.1 percent, to 2,001.57, falling short of its own closing high of 2,007.71 from Sept. 5.
The Nasdaq composite was up 9.43 points, or 0.2 percent, to 4,562.19, still well below its dot-com era peak.
Shares of home builders jumped after builder confidence in the market for new homes rose to its highest level in nearly nine years. Miami-based Lennar Corp. rose nearly 6 percent, the most in the S&P 500 index.
The S&P 500 has risen 8 percent since January, extending the bull market into a sixth year. Companies have been hiring at a solid pace and manufacturing and construction have picked up.
John Lynch, regional chief investment officer for Wells Fargo Private Bank, said the stronger economy is a big reason that stocks have risen.
“The economy is tracking at a 3 percent rate of growth, and corporate profits are at a record level,” he said, shortly before the Dow’s record close.
But the good developments have also worried the market because they could prompt the Fed to raise interest rates to head off inflation.
On Wednesday, at least, those concerns eased. Even before the Fed policy statement, there was news that inflation is tame. The government reported that U.S. consumer prices edged down in August, the first monthly drop since the spring of 2013.
Oil fell after the Energy Department reported an unexpected increase in U.S. crude oil supplies. Benchmark U.S. oil fell 46 cents to $94.42 a barrel. Brent crude, a benchmark for international oils imported by many U.S. refineries, dropped 8 cents to $98.87 a barrel in London. Inventories of U.S. crude oil rose by 3.7 million barrels last week. Most analysts had expected a decline, which is typical for this time of year. In other energy futures, wholesale gasoline rose 1 cent to $2.569 a gallon. Heating oil fell 1.1 cents to $2.745 a gallon. Natural gas gained 1.8 cents to $4.013 per 1,000 cubic feet.
Among stocks making big moves:
— DuPont surged $3.42 to $69.25, or 5.2 percent, the biggest gain in the Dow by far. Investors bought the stock on news that activist investor Nelson Peltz had sent a letter to the company’s board suggesting it split in two. His Trian Fund Management LP said it has been in private talks with DuPont for more than a year to boost shareholder value and improve its financial performance.
— FedEx rose $5.05, or 3 percent, to $159.71 after its quarterly profit beat forecasts by financial analysts. The company benefited from an increase in shipments to people shopping online.
— General Mills, the food company behind Cheerios cereal and Yoplait yogurt, fell $2.35, or 4.4 percent, to $50.83 after reporting disappointing quarterly results. Its stock was the third-biggest loser in the S&P 500.
Gold, which was flat minutes before the Fed news on interest rates, ended down 80 cents, or 0.1 percent, to $1,235.90 an ounce. Silver rose 1.3 cents, or 0.1 percent, to $18.73 an ounce. Copper fell 2.3 cents, or 0.7 percent, to $3.14 a pound.
In government bond trading, the yield on the 10-year Treasury note edged up to 2.62 percent, from 2.59 percent late Tuesday. The yield has moved between a high of 3 percent and a low of 2.34 percent this year.
BERNARD CONDON, AP Business Writer
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