S&P 500 at highest level since June 2008

Click chart for more market data. By Hibah Yousuf, staff reporterApril 27, 2011: 3:34 PM ET

NEW YORK (CNNMoney) — Stocks rose Wednesday afternoon after Federal Reserve chairman Ben Bernanke reassured investors that the nation’s economic recovery is on track.

A couple of hours before the press conference, the central bank said it would keep interest rates low and end its $600 billion Treasury buying program in June.

Bernanke said the Fed will only reverse course to tighten rates when the economy is ready.

With less than an hour left in trading, the Dow Jones industrial average (INDU) gained 64 points, or 0.4%, the S&P 500 (SPX) rose 4 points, or 0.3%, and the Nasdaq Composite (COMP) added 14 points, or 0.5%.

The modest gains put all three indexes at fresh multi-year highs. The Dow climbed to the highest levels since May 2008, while the S&P 500 rose to the highest levels since June 2008. The Nasdaq pushed to the highest levels since January 2001.

With the Fed’s meeting on top of 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.

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

Bernanke said the Fed would end its bond-buying program “without tapering,” and that there were no plans to do more. “The trade-offs are getting less attractive,” he said. Bernanke also noted that the central bank’s balance sheet would remain constant after QE2 ends.

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

Companies: GE’s (GE, Fortune 500) stock jumped more than 3%, leading the Dow’s gainers. At an annual shareholder’s meeting, the conglomerate’s CFO said the company’s profit growth over the next few years will be the fastest it has seen in a decade.

Shares of Merck (MRK, Fortune 500) rose 1.4% after the Dow component got the green light from its board for a $5 billion share buyback program.

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

For-profit educator DeVry’s (DV) stock was the best performer on the S&P 500 after popping more than 7%. Late Tuesday, DeVry reported a 14% rise in its quarterly profit.

Amazon.com (AMZN, Fortune 500)’s stock was the biggest winner on the Nasdaq, with shares rising 7%, 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.

Meanwhile, shares of Broadcom (BRCM, Fortune 500) sank almost 12% after the semiconductor company issued a disappointing outlook. Broadcom was the worst performing company in the S&P 500 and Nasdaq.

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