U.S. stocks jumped on Wednesday, bouncing back from the prior day's sharp fall, after minutes from the Federal Reserve's last meeting had central bankers discussing ways to normalize interest rates.
"The conversation is clearly shifting from this unprecedented accommodation to policy firming. For equity markets, this is a positive signal, because the economic momentum is more upbeat, but at the same time tightening is not imminent," said Anastasia Amoroso, a Houston-based global market strategist at J.P. Morgan Funds.
The central bank last month trimmed its monthly asset buying to $45 billion, its fourth consecutive $10 billion reduction. Fed officials also said the economy was picking up steam and the labor market improving.
Tiffany climbed after the high-end jeweler posted quarterly profit that topped expectations; Netflix gained after saying it would broaden its online-video offerings in Europe. Target gained after the discount retailer reported a 0.3 percent decline in U.S. same-store sales, better than the 1.1 percent drop expected by analysts polled by Consensus Metrix. Lorillard rallied after Reuters reported Reynolds American was in advanced talks to acquire the cigarette company.
Also rebounding after its recent battering, the Russell 2000 climbed 0.6 percent, but the gauge of small companies still remained roughly 9 percent from its all-time high.
"I'm actually somewhat gratified to see the Russell 2000 get hammered; it's so expensive, and I don't like to see that amount of speculation going on in the market, so I would like to see it cool off. A 10 to 15 percent correction sets it on a more stable glide path," said Jack Ablin, chief investment officer at BMO Private Bank.