Stocks inch higher after Fed holds firm

Click chart for more market data. By Hibah Yousuf, staff reporterApril 27, 2011: 12:58 PM ET

NEW YORK (CNNMoney) — Stocks inched higher after the Federal Reserve said it would keep interest rates low and end its $600 billion Treasury buying program in June, as expected.

Most investors are taking to the sidelines ahead of Fed chair Ben Bernanke’s inaugural press conference at 2:15 pm ET.

Following the Fed’s statement, the Dow Jones industrial average (INDU) gained 43 points, or 0.3%, the S&P 500 (SPX) rose 2 points, or 0.1%, and the Nasdaq Composite (COMP) added 4 points, or 0.2%.

With this week’s onslaught of corporate earnings and economic reports, “investors have a lot to digest,” said Fred Dickson, chief market strategist at D.A. Davidson & Co.

While Dickson wasn’t expecting the Fed committee to say anything the market hasn’t heard before, he said investors will be tuning in at 2:15 pm ET to see if Bernanke offers any new hints about inflation.

Bernanke has rarely taken journalists’ questions publicly.

“Trying to guess how Bernanke will respond to the media’s question is a tough game to play,” Dickson said.

“We hope the media will ask Bernanke how much of the $600 billion from QE2 he think has made its way into the stock market and commodities, and whether the Fed will maintain the current level of assets on its balance sheets after QE2, or let them run off,” he added.

U.S. stocks finished at their highest levels in three years on Tuesday.

Companies: Johnson & Johnson will buy Synthes, a Swiss maker of orthopedic devices, for $21.3 billion. Shares of J&J (JNJ, Fortune 500) fell nearly 1%.

Shares of Dow component Boeing (BA, Fortune 500) rose 1% after the aeronautics company reported a 13% increase in its first-quarter profit.

Amazon.com (AMZN, Fortune 500)’s stock rose 4% even though the online merchant reported first-quarter earnings that fell by one-third compared to a year earlier and sharply missed Wall Street forecasts.

After the close, Starbucks (SBUX, Fortune 500) reports results. The coffee retailer is expected to earn 34 cents a share.

Economy: The government said new orders for durable goods increased 2.5% in March, after a 0.7% rise the month before. Economists surveyed by Briefing.com expect an increase of 1.8% in March.

World markets: European stocks closed mixed. The DAX in Germany rose 0.7%, France’s CAC 40 gained 0.7%, while Britain’s FTSE 100 ended slightly lower.

Asian markets also ended mixed. The Shanghai Composite and the Hang Seng in Hong Kong both fell about 0.5%, while Japan’s Nikkei rallied 1.4%.

Standard & Poor’s warned that Japan’s government could face a downgrade of its credit rating within the next few years, as the nation’s economy recovers from the March 11 earthquake and tsunami.

S&P lowered its outlook on Japan’s long-term debt to “negative” from “stable,” saying the government will likely bear most of the cost of rebuilding. The ongoing struggle to contain a damaged nuclear power plant in Japan makes the outlook even more uncertain, the agency said.

Currencies and commodities: The dollar fell against the euro and the British pound, but rose 1.3% versus the Japanese yen.

Oil for June delivery gained 38 cents to $112.59 a barrel.

Gold futures for June delivery rose $5.00 to $1,508.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, with the yield rising to 3.37% from Tuesday’s yield of 3.32%. 

First Published: April 27, 2011: 9:44 AM ET