By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks gained Wednesday, readying the S&P 500 for its 13th higher close this year, after the Federal Reserve said interest rates would stay low until late 2014 and Apple Inc. surged on stellar earnings.
Stocks cleared loses and Treasury prices extended gains after the central bank released its statement saying economic conditions, including a "subdued outlook for inflation" would likely warrant keeping the Fed's benchmark rate at exceptionally low levels for longer than the central bank had previously projected.
"We're going to keep rates low for a long time. They are still worried about jobs and housing," said Jeremy Hare, managing director of investments at Gilford Securities.
"I don't think you'll see a housing market recovery until 2015 or 2016, which in turn will force the Fed to keep interest rates low, because the American dream is built on home ownership," Hare added.
After falling as much as 95 points, the Dow Jones Industrial Average (DJI) was lately up 93.58 points at 12,769.33, with 27 of its 30 components rising.
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 12.99 points to 1,327.64, 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 35.43 points to 2,822.07.
For every share falling three gained on the New York Stock Exchange, where 644 million shares traded as of 3:50 p.m. Eastern.
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.
"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.
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.