By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Dow trades above 17,040; S&P 500 trades above 2,000

The Dow industrials climbed in late afternoon trade on Thursday, as investors reacted to the release of minutes from the Federal Reserve's most recent policy-setting meeting.

Federal Reserve officials held off of a rate hike in September as many thought downside risks had increased, according to minutes of the meeting released Thursday.

Read: Fed minutes show worries about overseas led to caution at rate meeting (http://www.marketwatch.com/story/fed-minutes-show-worries-about-overseas-led-to-caution-at-rate-meeting-2015-10-08)

"There is a relief that the Fed acknowledged China, but also said its impact will be transitory," said Ryan Larson, head of equity trading, U.S. RBC Global Asset Management.

U.S. stocks had been seeing shaky trading ahead of the minutes, with stocks swinging in and out of positive territory, as the market awaited clues from the U.S. central bank's September policy meeting.

The blue chip index ultimately tipped higher after the minutes, rising 97 points, or 0.6%, higher at 17,010, with Caterpillar Inc. (CAT) leading gainers, up about 2.1%. Apple Inc. (AAPL), off 1.2%, limited the gains on the benchmark.

The S&P 500 broke through a technical level of 2,000, suggesting the broad stock-market index may push higher. The S&P 500 picked up 15 points, or 0.8%, to 2,011. Energy and materials marched higher, leading the gains, while all 10 main sectors were trading higher.

Larson noted that breaking through the 2,000 level and through the 50-day moving average is boosting optimism among investors in the short term.

The Nasdaq Composite Index , turned positive in late trade after being in negative territory for most of the session, weighed down by a decline in the biotech sector. The tech-heavy index was up 16 points, or about 0.3%, at 4,806.

"There was not anything surprising in the minutes, as we already knew why they decided to hold off the interest-rate hikes, so markets see no obstacles to climb," said Quincy Krosby, market strategist at Prudential Financial.

Need to know: Why this stock-market rebound isn't just a 'flash in the pan' (http://www.marketwatch.com/story/why-this-stock-market-rebound-isnt-just-a-flash-in-the-pan-2015-10-08)

Fed minutes: A correction in the stock market and concerns about China were critical in the Federal Reserve's decision to keep interest rates near zero, minutes from the last meeting released Thursday show. "Many [officials] acknowledged that recent global economic and financial developments may have increased the downside risks to economic activity somewhat," the minutes from the Federal Open Market Committee said.

In economic news, the jobless claims reported showed the number of people who applied for U.S. unemployment benefits (http://www.marketwatch.com/story/jobless-claims-fall-to-263000-lowest-since-july-2015-10-08) fell by 13,000 to 263,000 in the week ended Oct. 3, marking the lowest level since mid-July.

Stocks to watch: Investors will also be braced for the unofficial kickoff to earnings season, which comes after the close of trading Thursday with earnings from Alcoa Inc.(AA). Shares in Alcoa were down 1.6%.

The aluminum producer is expected to post a year-over-year profit decline for the first time in six quarters (http://www.marketwatch.com/story/what-to-watch-for-in-alcoas-earnings-2015-10-05). It could lead out what's expected to be the weakest reporting season in six years for S&P 500 companies.

Shares of Encana Corp. (ECA) rose 3.6% after Canada Pension Plan Investment Board and The Broe Group said they have agreed to buy oil and gas assets from the company for a value of about $900 million (http://www.marketwatch.com/story/cppib-and-broe-group-to-buy-encana-oil-gas-assets-for-900-million-2015-10-08).

Dell Inc. is in talks to combine with EMC Corp.(EMC), according to people familiar with the matter, reported The Wall Street Journal late Wednesday (http://www.marketwatch.com/story/dell-discussing-merger-with-emc-sources-say-2015-10-07). EMC shares rose 4.9%.

Shares of Amazon.com Inc.(AMZN) fell 2.3% after a Bloomberg report (http://www.marketwatch.com/story/amazon-share-rebound-after-report-of-live-tv-service-ambitions-2015-10-07) that the online retailer could be showing interest in launching a live, online TV service. Etsy (ETSY) shares fell 5% after Amazon announced the launch of a rival to the online crafts marketplace (http://www.marketwatch.com/story/etsys-stock-on-track-for-a-selloff-after-amazon-launches-rival-service-2015-10-08).

Other markets: The Shanghai Composite Index closed up just under 3%, as that market reopened after a five-session holiday break, but the gain wasn't enough to satisfy investors. The Hang Seng China Enterprises Index rallied 11.5%, while the Chinese market was closed, and investors had expected bigger gains from China, said Angus Nicholson, market analyst at IG.

Also read: China could become a big problem for stocks again (http://www.marketwatch.com/story/china-could-become-a-big-problem-for-us-stocks-again-2015-10-07)

The Nikkei 225 index finished down nearly 1%, after weak Japanese machinery orders prompted buying of the Japanese yen , which rose against the U.S. dollar (http://www.marketwatch.com/story/us-dollar-lower-against-yen-as-nikkei-falls-2015-10-08-21031810).

European stocks closed mostly higher, with the FTSE 100 index finish with gains for a seventh straight day (http://www.marketwatch.com/story/ftse-100-breaks-six-day-winning-streak-ahead-of-boe-meeting-2015-10-08). The Bank of England left key interest rates unchanged at the conclusion of its rate-setting meeting.

Oil prices (http://www.marketwatch.com/story/oil-prices-rise-but-market-concerned-over-us-stockpiles-2015-10-08) continued to gain, jumped 3.7% to $49,59 a barrel. Gold prices declined 0.7%, while the dollar fell against the euro right after the release of the minutes but recovered poise.

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(END) Dow Jones Newswires

October 08, 2015 15:20 ET (19:20 GMT)

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