By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks erased losses to turn higher Wednesday after the Federal Reserve said it would keep interest rates near zero until at least late 2014, extending its previous pledge by more than a year.
The Fed's decision "should provide a boost to growth. In theory, lower interest rates can boost mortgage refinancing, lift equity prices, and increase business investment while supporting vehicle and home sales," noted Ryan Sweet, a senior economist at Moody's Analytics.
After falling as much as 95 points, the Dow Jones Industrial Average (DJI) was lately up 49.91 points at 12,725.13, with 23 of its 30 components rising.
"The equity market loves the stimulus, but if the Fed's view is true, than I would think that equities, especially in the near term, will come crashing down to earth. If the Fed has missed the call, then today might offer some of the best value in the stock market in quite some time," offered Kevin Giddis, a fixed-income analyst at Morgan Keegan.
Boeing Co. (BA) was among those reversing course, with the aerospace manufacturer shedding losses that came on its weaker-than-expected 2012 earnings forecast.
The S&P 500 Index (SPX) gained 7.92 points to 1,322.57, with technology shares leading gains that included all but one sector of its 10 industry groups.
The index has closed lower only three sessions so far this year.
Up for a second session, the Nasdaq Composite (RIXF) rose 30.39 points to 2,817.03.
For every share falling nearly three gained on the New York Stock Exchange, where 425 million shares traded as of 1:55 p.m. Eastern.
U.S. stocks had trended mostly lower ahead of the Fed as investors sorted through mixed corporate earnings, with Apple Inc.'s (AAPL) record profit helping bolster the Nasdaq Composite.
"It is pretty much Apple on the plus side," said Andrew Fitzpatrick, director of investments at Hinsdale Associates Inc.
Wall Street's action marks "more of a consolidation of the market, which is healthy, given the three weeks that were very positive to begin the year, so we're having a little bit of a pause here," Fitzpatrick said.
Apple (AAPL) shares rallied a day after the globe's biggest technology firm reported first-quarter earnings that blew past Wall Street estimates.
Also in the tech sector, disappointing outlooks from Advanced Micro Devices Inc. (AMD) and Nvidia Corp. (NVDA) weighed.
The Fed's interest-rate decision will be followed by a rate forecast at 2 p.m. and a press conference with Chairman Ben Bernanke at 2:15 p.m.