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Stocks end with gains as Fed holds off raising rate

A Wall Street sign is mounted near the

A Wall Street sign is mounted near the flag-draped facade of the New York Stock Exchange on May 11, 2007. Photo Credit: AP / Richard Drew

Stock indexes closed with modest gains Wednesday despite a midday swoon that snapped when the Federal Reserve policymakers let it be known that there is no plan to raise interest rates immediately.

Te Federal Reserve Open Market Committee said it was seeing some improvement in the economy, but not enough to begin raising interest rates. The Fed's benchmark rate has remained near zero for more than six years in an effort to bolster the economy and encourage borrowing, lending and investment. Bond prices rose, sending yields slightly lower.

At the close on Wall Street, the Dow Jones industrial average recovered from a midday swoon and was up 31.3 points, about 0.2 percent, at 17,935.7. The Standard ... Poor's 500 gained 4.2 points, about 0.2 percent, to 2,100.4. The Nasdaq composite added 9.3 points, about 0.2 percent, to nearly 5,065.

As the markets closed, the price of U.S. benchmark crude oil was down 12 cents, about 0.2 percent, at $59.85 a barrel on the New York Mercantile Exchange.

The Fed said in it its statement that the economy has strengthened after a slump early in the year. However the central bank also said it plans to wait to see more gains in employment before it raises interest rates above their historically low levels. The Fed didn't provide a timetable for when it would begin raising rates, but it said it expects the economy's gains to pick up later in the year.

The Fed has held its key short-term rate at a record low near zero since late 2008, and it hasn't increased rates since 2006.

"This makes the market feel more confident," said analyst Alan Rechtschaffen, financial adviser at UBS Wealth Management Americas. "What the Fed is telling you is that they're in no rush to raise interest rates right now."

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