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Investor sentiment received a boost after the Federal Reserve reiterated it would continue with its economic stimulus package. Meanwhile, Cypriot lawmakers discussed measures to bail out the country from its financial crisis. All top ten S&P 500 industry groups finished in the green with Consumer Discretionary stocks leading the pack.

The Dow Jones Industrial Average (DJI) gained 0.4% to close the day at 14,511.73. The S&P 500 increased 0.7% to finish yesterday’s trading session at 1,558.71. The tech-laden Nasdaq Composite Index climbed 0.8% to end at 3,254.19. The fear-gauge CBOE Volatility Index (VIX) dropped 12% to settle at 12.67. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.9 billion shares, below 2012’s average of 6.48 billion shares. Advancing stocks outnumbered the decliners. For the 71% that advanced, 26% declined.

Benchmarks finished in the green after the Federal Reserve confirmed that it would continue buying $85 billion worth of bonds. The Federal Reserve Open Market Committee said it will continue with its bond buying program to keep interest rates near-zero. The Fed is also targeting an unemployment rate of 6.5% and an inflation rate of 2.5%. Last month, the unemployment rate was at 7.7%. Chairman of the Federal Reserve, Ben Bernanke said: “In light of this outlook and following a review of the efficacy and cost of additional asset purchases, the committee today reaffirmed its asset purchase program and its federal funds guidance.”

The central bank revised growth rates of the U.S. economy in the range of 2.3% and 2.8% this year, 2.9% and 3.4% for 2014 and 2.9% and 3.7% for 2015. After Democrats and Republicans failed to meet on common ground, budgetary cuts were implemented from March 1. The “sequestration cuts” will negatively affect the budget in future with expected layoffs on the cards.

On the international front, Cyprus held talks with Russia on Wednesday in an attempt to bailout the country from financial distress. Cyprus has asked Russia to extend the payment period of 2.5 billion Euro loans, which expires in 2016. It is also asking for a discount on the prevailing interest rate of 4.5%. If Cyprus does not reach an agreement on the bailout, not only will the country exit the euro but it will also send shock waves through financial markets worldwide. Earlier, the Cyprus parliament voted against imposing tax on savings deposited in the banks.

On the earnings front, shares of food processing company, General Mills, Inc. (NYSE:GIS) gained 2.6% after reporting profits for fiscal third-quarter. The company has gained from recent acquisitions. Brands of the company include Cheerios and Bretty Crocker.  Meanwhile, shares of Lennar Corporation (NYSE:LEN) surged 4.8% after posting first-quarter profits above the Street’s expectations. The company has benefitted from rising rents and low interest rates.

Consumer Discretionary stocks gained the most among the S&P 500 industry groups. The Consumer Discretionary SPDR (XLY) increased 1.2%. Stocks such as Comcast Corporation (NASDAQ:CMCSA), CBS Corporation (NYSE:CBS), the Walt Disney Company (NYSE:DIS), Time Warner Inc. (NYSE:TWX) and Netflix, Inc. (NASDAQ:NFLX) gained 2.1%, 1.2%, 1.1%, 1.6% and 1.0%, respectively.

The housing sector also had a good run. SPDR S&P Homebuilders (XHB) gained 2.5%. Stocks such as the Ryland Group, Inc. (NYSE:RYL), KB Home (NYSE:KBH), M.D.C. Holdings, Inc. (NYSE:MDC), Hovnanian Enterprises, Inc. (NYSE:HOV) and PulteGroup, Inc. (NYSE:PHM) gained 4.0%, 2.6%, 3.3%, 2.1% and 2.7%, respectively.

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