Stocks closed little changed on Wednesday even after the Federal Reserve kept interest rates steady and struck an upbeat tone on the health of the U.S. economy.
The Dow Jones Industrial Average ended the day up 11.60 points at 28,734.45, a move of less than 0.1%. The 30-stock average had climbed as much as 221 points earlier in the session before reversing course. The S&P 500 fell less than 0.1% to 3,273.40 while the Nasdaq Composite advanced less than 0.1% to 9,275.16.
"News that the Fed is still increasing its balance sheet will be music to the stock market's ears as many investors believe the liquidity somehow makes its way into the stock market helping to fuel the rally," said Chris Rupkey, chief financial economist at MUFG.
The Federal Open Market Committee held the overnight benchmark rate in a range between 1.5% and 1.75%, as expected. In a statement, the Fed's policymaking committee said the direction of rate policy is predicated on whether inflation can return to their 2% objective. The central bank also remarked the labor market remains "strong" while the economy is growing at a "moderate rate."
"The labor market continues to perform well," Fed Chairman Jerome Powell said in a news conference. "We see strong job creation, we see low unemployment, very importantly we see labor force participation continuing to move up."
The benchmark 10-year Treasury yield fell to 1.59%, lifting bond prices. The 2-year rate slipped to 1.42%.
Stocks got a lift earlier in the day as Apple led a parade of companies that reported better-than-expected earnings.
Apple gained 2.1% and hit a record after its quarterly results easily beat analyst expectations. The company's results were driven in part because of an 8% uptick in iPhone sales, which totaled $55.96 billion.
"Apple pleasantly surprised investors on multiple fronts,but most importantly materially exceeded investor expectations on iPhone revenues, which returned to growth in the quarter much ahead of investor expectations," JPMorgan analyst Samik Chatterjee said in a note.
McDonald's, another Dow component, posted better-than-expected quarterly results, sending the stock up 1.9%. Dow Inc and ADP reported profits that beat analyst estimates as well along with General Electric, which surged 10.3%.
So far, nearly 28% of S&P 500 companies have reported results for the previous quarter. Of those companies, about 70% have beaten analyst expectations, FactSet data shows.
Boeing shares rose more than 2% even after the aircraft manufacturer reported its first annual loss since 1997.
"Like every earning season, you get a point in time where you shift from a macro focus to a micro focus. That seems to be the case today," said Art Hogan, chief market strategist at National Securities. "That's okay, because the macro focus really has been Chinese coronavirus, and what eventual economic damage that might do."
"The market has done a pretty efficient job of picking the sectors that are likely to be hit the hardest and really punishing that group," he added.
AMD shares, however, dropped 6% after the semiconductor company issued weaker-than-forecast revenue guidance for the first quarter. Xilinx also gave a disappointing sales forecast, which sent its stock down more than 10%. Those moves dragged down the VanEck Vectors Semiconductor ETF by 1.5%. Semiconductor stocks have had a rough week as worries over the coronavirus outbreak dented sentiment over the global economy.
Chinese officials said late Tuesday that the death toll has risen to 132 with total cases in China now standing at 5,974. The White House told U.S. airlines on Tuesday that the administration is considering a suspension of flights from China to the U.S.
"Because of that melt-up we had at the end of 2019, stocks are not cheap. That leaves almost no margin for unknowns to pop up," said Tim Courtney, chief investment officer at Exencial Wealth Advisors. But in general, "we're optimistic that we'll have some average earnings growth and GDP growth."
—CNBC's Patti Domm, Elliot Smith and Yun Li contributed to this report.