Jan. 25, 2012 at 12:39 PM ET
NEW YORK — Stocks moved upward Wednesday immediately following the Federal Reserve's announcement that it will not raise interest rates until at least late 2014 —even later than investors expected — in an effort to support a sluggish economic recovery.
Earlier in the trading day, stocks were down on fears of Greece's slow progress in talks with bondholders about reducing the nation's crushing debt load.
Tech stocks rose, bucking the wider market, after consumer electronics giant Apple Inc. reported a best-ever quarter driven by strong sales of iPhones and iPads.
Apple's stock jumped 6.6 percent, helping lift the Nasdaq composite index 12 points, or 0.4 percent, to 2,798. The Nasdaq is up 7.4 percent this year, more than twice the gain for the Dow Jones industrial average.
As fears recede about the European debt crisis, big-time investors such as hedge funds will be drawn back into the market, fueling more gains, said Joe Bell, senior Equity Strategist at Schaeffer's Investment Research.
After such a strong rally, "we could see a ... slight pullback or consolidation; but overall we're bullish," Bell said.
The Fed offered details about its plans to keep interest rates very low through 2014, an important issue for financial companies that lend to consumers and businesses. Access to credit is vital for the economic recovery. Low interest rates also encourage investment in stocks by reducing the returns traders can earn from many bonds.
The Fed will also release an economic forecast later in the day, and Fed Chairman Ben Bernanke will take questions from reporters in his quarterly news conference.
European markets fell broadly as Greece's bondholders held a closed-door meeting to discuss whether they will continue to negotiate with the crisis-stricken nation.
Greece wants the investors, mostly banks and hedge funds, to voluntarily write off about half of its debt. Otherwise, Greece will be unable to obtain needed bailout cash and will default. That could set off a financial crisis similar to the aftermath of Lehman Bros.' failure in 2008.
The STOXX 50 index of European shares fell nearly 1 percent. Borrowing costs for Italy and France increased, a sign of traders' fears that the debt crisis will spread. Adding to the gloom was a report that Britain's economy shrank by 0.2 percent in the fourth quarter.
Apple's gains helped it overtake Exxon Mobil Corp. as the company with the biggest market value. The Cupertino, California, electronics maker said late Tuesday that it sold 37 million iPhones in its fiscal first quarter, the first period after the death of CEO and co-founder Steve Jobs. That was coupled with a big jump in iPad sales to 15.4 million, and a more modest increase in Mac sales.
Apple's net income leapt 118 percent from the same quarter a year earlier. Revenue soared 73 percent. Both results blew the doors off Wall Street's expectations.
Among the other companies making big moves after announcing earnings:
— US Airways Group Inc. jumped 13.6 percent and Delta Air Lines Inc. rose 8.1 percent. Both carriers reported earnings that were far better than Wall Street analysts expected. The airlines raised fares during the fourth quarter while keeping costs under control. Delta also cut the number of flights it makes to keep pace with demand.
— WellPoint Inc., the largest U.S. health care insurer based on enrollment, fell 6 percent. The company's fourth-quarter earnings dropped 39 percent, far more than analysts had expected. The Indianapolis company's full-year forecast also fell short of Wall Street's forecasts. Medical claims, its largest expense, rose nearly 10 percent in the quarter.
Associated Press contributed to this report.