US stocks cheer Fed's low rate extension

New York - US stocks rose on Wednesday as investors welcomed the Federal Reserve's decision to hold interest rates near zero for another three years, while Apple's blockbuster earnings also lifted sentiment.

The Dow Jones Industrial Average rose 83.10 points to finish at 12 758.85 and the broad-based S&P 500 advanced 11.41 points to 1 326.06.

The tech-rich Nasdaq Composite was the biggest gainer, adding 31.67 points to 2 818.31, lifted by Apple's record-breaking earnings reported after the market closed on Tuesday.

"The broad market was able to fight through moderate selling pressure this morning, but gains didn't come until after the Federal Open Market Committee issued its latest policy statement," Briefing.com analysts said.

The Fed's policy-setting FOMC said it would keep its key federal funds interest rate at "exceptionally low levels" through at least 2014, extending a prior timeframe of mid-2013.

The FOMC also cut its US growth forecasts amid slow business investment and a depressed housing sector.

"We continue to see headwinds coming from Europe," Fed chairperson Ben Bernanke said.

"I don't think we're ready to declare that we have entered a strong phase at this point."

Apple was king Wednesday after it blew past forecasts and reported record quarterly net profit and revenue, driven by strong sales of the new iPhone.

Apple shares bounced up 6.2% to $446.66, catapulting the California firm to first place in market capitalisation ahead of ExxonMobil.

Apple first surpassed ExxonMobil in market value last August and the two companies have been jockeying back and forth since then.

Aerospace and defense giant Boeing posted a 20% profit rise for the fourth quarter, beating market estimates, but lowered its 2012 earnings forecast. Boeing rose 0.6% to $75.82.

Delta Air Lines soared 6.2% to $9.96 after reporting fourth-quarter earnings well ahead of market expectation and predicting revenue per passenger would rise 15% in 2012 from 2011.

Bond prices rose. The yield on the 10-year Treasury fell to 2.01% from 2.06% on Tuesday, while the 30-year slipped to 3.15% from 3.16%.

Bond prices and yields in opposite directions.