U.S. stocks closed higher on Wednesday as investors shook off a plunge in oil prices and digested the Federal Reserve's meeting minutes as mostly dovish.
"Apple and the energy stocks are definitely having a (negative) effect on the Dow," said Paul Nolte, portfolio manager at Kingsview Asset Management. "I think it is a reaction in general to the Fed."
The Federal Reserve Open Market Committee released the minutes of its March meeting, revealing that central bank policy makers were divided over the timing of an interest rate hike.
"The minutes are peppered with a lot of dovish language," said Stephen Freedman, senior investment strategist at UBS. "That's why things have come full circle and it wasn't really market moving."
The S&P 500 and Dow initially dipped into negative territory before turning around to attempt gains on a more dovish take.
The Nasdaq outperformed the other major indices, closing up 40.59 points, or 0.83 percent, at 4,950.82.
The Dow Jones Industrial Average closed up 27.09 points, or 0.15 percent, at 17,902.51, with Nike leading gains and Chevron and Exxon Mobil the greatest laggards. Apple closed down 41 cents, or 0.33 percent, at $125.60 a share.
The S&P 500 closed up 5.57 points, or 0.27 percent, at 2,081.90.
The immediate reaction held that the Fed was "slightly more hawkish than we anticipated," said Art Hogan, chief market strategist at Wunderlich Securities.
In the minutes following the release, the dollar jumped about a third of a percent, with the euro back below $1.08. The U.S. 2-year Treasury note yield gained to 0.54 percent, while the 10-year Treasury note yield held steady near 1.91 percent.
"It's tough to read anything into the minutes other than they remain data dependent," said Chris Gaffney, president of EverBank World Markets. "The data since March has been negative and that would put a hike in September."
The Fed dropped "patient" from its March meeting statement as an indication it is setting up for normalization of monetary policy. The overall tone of the minutes was expected to remain dovish, but signs of division among the members over the timing of a rate hike initially led to a more hawkish interpretation.
However, the minutes showed only one policymaker saw inflation from wage growth. With the majority of the committee still seeing little inflationary pressure, "that means the Fed is a long, long way from tightening," said John Canally of LPL Financial.
Stocks traded choppily throughout the day, with the Dow and S&P 500 dipping into negative territory following a discouraging oil inventory report that sent oil prices sharply lower. The decline came after the Dow briefly gained 100 points in morning trade.
The market "looks like it wants to move higher but I still hear a lot of concern among investors about earnings," said Bruce McCain, chief investment strategist at Key Private Bank. "The overall tone of the market is trying to adjust to the disappointing tone in earnings and economic data."
U.S. stocks faded in the close on Tuesday to end mildly lower, breaking two days of gains.
The U.S. Energy Information Administration said weekly crude inventories rose by 10.9 million barrels, nearly a 14-year high and more than expected, adding to pressure on the commodity prices.
Brent was down more than 5.5 percent to below $55 a barrel, and crude settled down $3.56, or 6.6 percent, at $50.42 a barrel.
Earlier, oil prices fell more than a percent after data from the American Petroleum Institute (API) showed U.S. crude stocks surged 12.2 million barrels last week against analyst expectations for an increase of 3.4 million barrels.
The decline in oil follows a rally on Monday and Tuesday, when U.S. crude approached 2015 highs.
Still, oil continued to hold in a range. Stable prices bring more predictability, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. Oil "volatility could be unwelcome for the market."
European equities closed flat despite a surge in energy stocks following news that Royal Dutch Shell will buy BG Group for $70 billion in cash and stock in the first major oil company takeover deal since Chevron bought Texaco for $36 billion in 2000.
"This move by Shell and BG raises hopes that the crash in oil prices is stabilizing and the global economy will pick up speed perhaps rather sooner than anticipated, about 6 months," said Peter Cardillo, chief market economist at Rockwell Global Capital.
New York Federal Reserve President William Dudley said Wednesday morning that payroll growth has been stronger than the overall economy and "something was off."
"Again we have this information void that gives investors little impetus to get out in front of it," Luschini said.