Stocks pushed higher Wednesday despite weak demand at the five-year Treasury auction.
This came after stocks closed at fresh 2009 highsin the prior session as the dollar weakened.
This morning, the dollar fell to a fresh one-year low against the euro and other currencies.
Investors are also waiting on the Fed statement, due out at 2:15pm today. They widely expect the Fed will keep interest rates at a record low but will be combing the statement for any signal that policy makers plan to reel in some of the stimulus measures that have pumped trillions into the banking system and kept currency moves subdued.
The Treasury auctioned $40 billion of five-year notes that fetched a yield of 2.47 percent. Demand was weak, with a bid-to-cover ratio of 2.40, This came after strong demand for the two-year auction on Tuesday. The seven-year auction is tomorrow.
Ford shares jumped after the automaker offered an upbeat outlook: CEO Alan Mulally said the auto industry is recovering and he expects sales to rise over the next two years. The U.S. market is "looking good," Mulally said, but added that the company is looking to Asia to juice sales.
Also on the positive side, mortgage applications jumped 12.8 percentlast week to their highest level since late May. Interest in home-buying increased as mortgage rates fell below 5 percent.
On the earnings front, General Millsbeat earnings expectations, helped by strong sales in the U.S. and lower commodity costs, and raised its full-year forecast. Its shares advanced.
AutoZone shares fell after the auto-parts chain missed its earnings targetamid a calendar shift and as customers shifted toward lower-margin products.
Bank of America and Citigroup advanced, while many other banks were in the red. Bank of America and JPMorgan Chase are among banks that have agreed to overhaul overdraft fees, just as lawmakers prepare to implement sweeping credit card changes.
Seagate Technology gained after Deutsche Bank upgraded the stock to "buy," based on expectations for better demand and higher margins at the small-cap computer disk maker.
And Palm shares climbed after the company said it expects to raise $313.1 million from a sale of shares at $16.25 each, a 5 percent discount to Tuesday's closing price. Palm shares had been up about 15 percent over the past several days amid talks of a possible takeover bid as traders scurried to cover short positions.
Microsoft shares advanced amid news that the software giant is reportedly developing a tablet-style PC, according to widely followed technology blog Gizmodo.
Life insurers got a downgrade from Morgan Stanley to "in line" from "attractive." Prudential Financial and Union Group both declined after Morgan cut its ratings on the stocks.
AMR skidded after the parent of American Airlines sold $250 million in convertible senior notes due in 2014.