WASHINGTON -- After two days of worrying about Europe, the stock market got a boost from the Federal Reserve Wednesday.
The Fed said the U.S. economy has strengthened but still needs support from the central bank.
The Dow Jones industrial average touched an all-time high after the Fed said it plans to continue buying bonds and keep interest rates low, at least until unemployment eases. The blue-chip index eased off its peak but still ended 55 points higher for the day.
Fed Chairman Ben Bernanke also said that the financial crisis in the Mediterranean island nation of Cyprus posed no major risk to the U.S.
The Dow was up 44 points shortly before the Fed announcement at 2 p.m. It rose as much as 91 points shortly after the Fed released its policy statement, touching an all-time high of 14,546 at 2:25 p.m.
"We are seeing improvement," Fed Chairman Ben Bernanke said at a news conference. "One thing we would need is to see this is not temporary improvement."
The Fed plans to keep buying $85 billion in bonds a month indefinitely to keep long-term borrowing costs down and spur investment. It also said it would keep short-term interest rates low, at least until unemployment falls to 6.5 percent.
Unemployment fell last month to 7.7 percent, the lowest in four years. The Fed doesn't expect the rate to reach its target until 2015.
Investor attention returned to Europe earlier this week after several months' respite.
The reason is Cyprus. The nation is negotiating with international lenders, seeking support for its ailing financial system. Without a bailout deal, Cyprus' banks could collapse, devastating the country's economy and potentially forcing it to exit the euro currency group. That could roil global financial markets.
Stocks fell Monday on concerns about Cyprus. Stock markets were little changed Tuesday.
On Wednesday, the Dow closed up 55.91 points, or 0.4 percent, to 14,511.73. The Standard & Poor's 500 index rose 10.37 points, or 0.7 percent, to 1,558.71. The Nasdaq composite index rose 25.09, or 0.8 percent, to 3,254.19.
The Dow is up 10.7 percent for the year. From March 1 through March 14, the index had a 10-day winning streak -- its longest since 1996. The streak boosted the Dow by 484 points, to 14,539.
The S&P 500, meanwhile, is just six points below its all-time high of 1,565, reached in October 2007. It is up 9.3 percent so far this year.
Nine of the 10 industries in the S&P index rose Wednesday, led by consumer discretionary and consumer staple companies.
General Mills rose $1.19, or 2.6 percent, to $47.61 after its fiscal third-quarter profit rose 2 percent. The food company, whose brands include Cheerios and Betty Crocker, is benefiting from recent acquisitions.
Williams-Sonoma's stock soared after the home goods retailer said its fourth-quarter net income jumped 9 percent and beat expectations. The stock was up $4.64, or 10.3 percent, to $49.85.