Fed Message Spurs Sound, Fury, Flat Finish

Stocks took another big swing Wednesday afternoon, giving back most gains after the Federal Reserve said it will continue its policy of low interest rates, now at zero to 0.25%. Indexes closed mixed.

The Dow Jones Industrial Average closed up 30 to 9802, off its intraday high of 140 points. The Nasdaq dropped 2 to close at 2056 and the S&P 500 was flat, up 1 at 1047.

The Federal Reserve Open Markets Committee concludes its October meeting today and will released minutes this afternoon, saying it anticipates keeping "an exceptionally low level of rates" that would continue "for an extended period" as economic conditions improve, a repetition of a closely watched phrase from the last meeting. 

The question isn't whether the Fed will change interests from current near-zero levels, but whether it will provide any signals as to a withdrawal of some of the extraordinary measures it's enacted to help the economy limit the damage from the credit crunch.

Currency analysts at Societe Generale had expected the phrase to stay, though some in the market expected a slight change.

"Any such change would be a big event for risky assets, which have been well supported by generous liquidity conditions," said the analysts, who suggested buying the dollar on dips on the "hunch" that concerns over growth, global liquidity and the bank sector will send investors away from perceived riskier assets.

A closely watched employment report from Automatic Data Processing and Macroeconomic Advisors showed private-sector payrolls declined by 203,000 last month, meeting the expectations of economists surveyed by Dow Jones Newswires. The government will issue its monthly payrolls report on Friday.

In Asia, the Nikkei 225 rose 0.4% while the Kospi Composite advanced 1.9% in Seoul. European stocks also were strong ahead of the U.S. interest rate decision.

The currency markets went into risk-taking mode, lifting the euro against major rivals and the dollar against the Japanese yen.

Crude futures inched higher Wednesday amid gains in European stock markets and a weaker dollar, but cautious sentiment ahead of U.S. oil inventories data and the Fed's policy statement kept a lid on further gains. As of 4:06 p.m., the front-month December light, sweet, crude contract on the New York Mercantile Exchange traded up 58 cents at $80.18 a barrel. Long-term forecasts called for a more moderate rate of global demand increases. STORY

Dow Jones Newswires contributed to this report.