(Updates, adds Fed reaction, changes comment)
By Chuck Mikolajczak
NEW YORK, Sept 17 (Reuters) - U.S. stocks edged higher in volatile trading on Wednesday after the U.S. Federal Reserve renewed its pledge to keep interest rates near zero for a “considerable time” and repeated concerns over slack in the labor market, standing firm against calls to overhaul its policy statement.
Interest rate projections, however, show Fed officials expect rate hikes, when they come, will do so at a quicker pace than previously forecast. The U.S. dollar jumped against the euro and yen after the statement and data release. Shares in financials, up 0.4 percent, extended gains to end the session as one of the better performing S&P sectors took the lead on the S&P 500.
“The two statements that were clear was, of course, the ‘considerable time’ maintained in there and the significant underutilization, so both those terms were left over from the previous one, which tells you there is not any meaningful moves anytime soon,” said Terry Dufrene, global investment specialist at JPMorgan Private Bank in New Orleans.
Stocks moved between gains and losses immediately after the statement before trending higher during Fed Chair Janet Yellen’s press conference, only to pare gains towards the close as the S&P 500 reached a technical resistance point near its record intraday high. The Dow managed to inch higher to set a closing record.
“What that means is people were anticipating more than what was in the statement, so it was an anticipatory reaction versus a reaction to the fact,” said Dufrene.
The Dow Jones industrial average rose 24.88 points, or 0.15 percent, to 17,156.85, the S&P 500 gained 2.59 points, or 0.13 percent, to 2,001.57 and the Nasdaq Composite was added 9.43 points, or 0.21 percent, to 4,562.19.
Materials were the best performing sector, up 0.6 percent, led by a 5.2 percent gain in DuPont after activist investor Nelson Peltz’s Trian Fund Management, among the biggest shareholders in the company, urged it to separate its high-growth businesses from those with strong cash flows.
Housing stocks outperformed the broader market in the wake of earnings from homebuilder Lennar Corp, up 5.8 percent to $41.40, and upbeat data on homebuilder sentiment. The PHLX housing index advanced 1.6 percent to notch its biggest gain in a month.
U.S. consumer prices fell for the first time in nearly 1-1/2 years in August and underlying inflation pressures were muted, giving the Fed more ammunition in its argument to keep rates low.
The largest percentage gainer on the New York Stock Exchange was Hyperdynamics, up 20.22 percent, while the largest percentage decliner was Rackspace Hosting, down 17.67 percent.
Among the most active stocks on the NYSE were Bank Of America, up 0.36 percent to $16.77; Petrobras, up 0.57 percent to $17.61; and General Electric, up 0.23 percent to $26.27.
On the Nasdaq, Apple Inc, up 0.7 percent to $101.58; Yahoo Inc, down 0.3 percent to $42.59; and Microsoft, down 0.5 percent to $46.52, were among the most actively traded.
Advancing issues outnumbered decliners on the NYSE by 1,563 to 1,500, for a 1.04-to-1 ratio on the upside; on the Nasdaq, 1,530 issues rose and 1,158 fell for a 1.32-to-1 ratio favoring advancers.
The broad S&P 500 index posted 43 new 52-week highs and 8 new lows; the Nasdaq Composite saw 57 new highs and 60 new lows.
Volume was active, with about 6.06 billion shares traded on U.S. exchanges, above the 5.65 billion average so far this month, according to data from BATS Global Markets.
Reporting by Chuck Mikolajczak