Dow closes at a record high, erases loss for year

NEW YORK - The Dow Jones industrial average closed at a new record high Wednesday as stocks rose after the Fed continued its measured tapering program and cut another $10 billion from its monthly stimulus payments.

The Dow Jones industrial average rose 45.47 points, or 0.3%, to 16,580.84, according to preliminary calculations. It was the Dow's first record close of the year, beating its previous all-time high of 16,576.66 set on Dec. 31.

The Standard & Poor's 500 stock index rose 5.62 points, or 0.3%, to 1,883.95 and the Nasdaq composite climbed 11.01 points, or 0.3%, to 4,114.56.

In a statement, the Federal Reserve said after its two-day meeting that it will reduce its monthly government bond purchases to $45 billion from $55 billion.

Janet Yellen, chair of the central bank, recently said policymakers will steadily pare the bond-buying and end it in the second half of 2014, barring a "notable" change in the economic outlook.

Hours before the 2 p.m. ET Fed announcement, investors got word of other big economic news. The economy grew far more slowly in the first quarter as extreme winter weather helped crimp activity, but Wall Street opted to treat it as old news and a temporary blip.

The nation's gross domestic product in the first three months of 2014 increased at just an 0.1% annual pace, down from 2.6% in the fourth quarter, the government said Wednesday. That's the weakest pace since the fourth quarter of 2012.

In notable corporate news: French engineering company Alstom said it will decide by the end of May whether to accept a $17 billion offer from General Electric for its energy business.

Twitter's shares were down about 10% to $38.28 and nearly 50% off its all-time high, after the micro-blogging company revealed that its user growth has stalled.

Some of the world's largest banks may be about to see criminal charges from federal prosecutors, according to a report in The New York Times. The report says that prosecutors are seeking to counter the perception that Wall Street's big banks are "too large to jail."

Oil futures were down $1.45, or 1.4%, to $99.84.

European shares ended mixed and in a narrow range. Inflation in the eurozone rose less than expected.

In Asia, Tokyo's Nikkei 225 index gained 0.1%to close at 14,304.11. The Bank of Japan avoided changes to its monetary policy despite concern that a consumption tax hike would sap growth.

The International Monetary Fund slashed its growth forecast for Russia to 0.2% from 1.3% for 2014 in the wake of the sanctions imposed on Ukraine for its actions in Crimea. The IMF also said that the sanctions were working and that investment in Russia is under threat.


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