Stocks Rise As Fed Maintains Asset Purchases

The U.S. stock market traded higher on Wednesday after a rocky start to the week on account of a banking crisis in Cyprus.

A rise in the euro versus the greenback and a decision from the FOMC to continue with its bond buying program helped stimulate risk appetite on the day.

The central bank said that it will continue buying $85 billion in mortgage-backed securities and Treasuries per month in order to stimulate the economy.

Major Averages
The Dow Jones Industrial Average climbed 54 points, or 0.37 percent, to 14,510.

The S&P 500 rose better than 10 points, or 0.67 percent, to 1,559.

The Nasdaq Composite gained 25 points, or 0.78 percent, to 3,254.

FOMC Rate Decision
As expected, the Federal Reserve kept its key benchmark interest rate at 0.25 percent. The central bank continues to hold rates near zero in an effort to stimulate the economy. An increase in interest rates is not expected this year.

The Fed also said that it will continue with its $85 billion per month bond buying program despite a pick up in the economy.

Commodities
Crude oil prices rose along with stocks on Wednesday. Late in the day, NYMEX crude futures had risen 0.87 percent to $92.96. Brent crude futures were last up 1.32 percent to $108.86. Natural gas fell on the day and was last down 0.53 percent to $3.95.

Precious metals were down slightly on the day. At last check, COMEX gold futures had lost 0.32 percent to $1,606.20 while silver was down 0.15 percent to $28.80. Copper futures registered a gain of better than 1 percent on the session.

In the grains complex, most contracts were higher on Wednesday. Corn climbed better than 0.50 percent and wheat was up almost 2 percent. Significant movers in soft commodities included cocoa, orange juice, and cotton.

Cocoa climbed better than 2.50 percent, while orange juice futures lost more than 3 percent. Cotton was last down better than 2 percent.

Bonds
Near the close of equities, the iShares Barclays 20+ Year Bond ETF (TLT) was down around 1 percent to $116.21. The fall in bond prices pushed yields higher on U.S. government debt.

The yield on the 2-Year Note rose one basis point to 0.25 percent while the 5-Year Note yield rose two basis points to 0.80 percent.

The 10-Year Note and 30-Year Bond yields were up five and six basis points to 1.94 percent and 3.18 percent, respectively.

Currencies
The U.S. dollar was slightly lower on the day. Near the equity close, the PowerShares DB US Dollar Index Bullish ETF (UUP), which tracks the performance of the greenback versus a basket of foreign currencies, had lost 0.22 percent to $22.56.

A rise in the euro helped risk appetite on Wednesday. At last check, the EUR/USD was trading up 0.65 percent to $1.2945. The other significant currency mover on the session was the USD/JPY which jumped 0.90 percent.

Volatility and Volume
The VIX plunged as stocks climbed on Wednesday. The widely watched measure of market fear lost around 14 percent to 12.37 on the session.

Volume was lighter than normal on the day. Around 95 million SPDR S&P 500 ETF (SPY) shares traded hands compared to a 3-month daily average of 130.7 million.

Stock Movers
Williams-Sonoma (WSM) surged better than 10 percent after the company released a bullish Q4 earnings report.

FedEx (FDX) plunged around 7 percent after the company's fiscal third-quarter earnings results disappointed investors.

Both Fannie Mae (OTC: FNMA) and Freddie Mac (OTC: FMCC) continued to surge on the day. FNMA added around 38 percent while FMCC was up 39 percent.

Obagi Medical Products (OMPI) jumped better than 28 percent after agreeing to be acquired by Valeant Pharmaceuticals (VRX).

Cintas (CTAS) lost more than 4 percent after the company's fiscal third-quarter earnings results.

Adobe (ADBE) climbed around 4 percent after reporting better than expected fiscal first-quarter financial results.

Francesca's Holdings (FRAN) was up around 7 percent near the close of trading after its Q4 results topped estimates.

Affymax (AFFY) had climbed around 20 percent near the close after a Seeking Alpha article suggested that the company's anemia treatment Omontys could be reinstated within months. The drug was recalled in February after reports of serious and life-threatening allergic reactions triggered by its administration.

Home-builder Lennar (LEN) traded up around 5 percent on Wednesday after the company released its fiscal first-quarter financial results prior to the opening bell.

Walter Investment Management (WAC) added around 6 percent on the session after the stock plunged on Tuesday in the wake of the company's quarterly earnings results.

BY Scott Rubin