* Federal Reserve sticks to stimulus in statement
* Cyprus banking crisis a reminder of global risks
* Homebuilders' stocks jump after Lennar earnings
* Dow up 0.4 pct; S&P 500 up 0.7 pct; Nasdaq up 0.8 pct
By Caroline Valetkevitch
NEW YORK, March 20 U.S. stocks climbed on
Wednesday, with the S&P 500 snapping a three-day losing streak
as the Federal Reserve reassured investors that it would keep
supporting the economy.
The housing sector's stocks ranked among the best
performers after Lennar Corp reported a first-quarter
profit well above analysts' expectations as lower interest rates
and rising rents increased home sales.
The Dow hit an intraday record high but fell short of
closing at another record. The view that the Fed will keep
interest rates at record lows for years has helped drive the
rally in stocks this year, along with signs of a strengthening
In its statement, the Fed said it would stick to its $85
billion monthly bond-buying stimulus, citing still high
unemployment levels, but said it would take into account the
possible risks of its policies.
The statement, and comments by Fed Chairman Ben Bernanke,
came as the market grapples with banking woes in Cyprus, the
most recent flare-up in the euro-zone debt crisis.
"It's amazing what a Fed on your side really brings for this
market. It really can wipe out a lot of uncertainty," said Burt
White, managing director and chief investment officer of LPL
Financial in Boston.
Cypriot leaders held crisis talks on Wednesday to avoid a
financial meltdown a day after the country's parliament rejected
a tax on bank deposits, which had been proposed over the weekend
by European Union officials.
Investors worry that a collapse of the banking system in
Cyprus will tighten credit across Europe and become another
hurdle in the region's bumpy road out of economic crisis.
The Dow Jones industrial average gained 55.91 points,
or 0.39 percent, to end at 14,511.73, after rising as high as
14,546.82, an intraday record.
The Standard & Poor's 500 Index rose 10.37 points,
or 0.67 percent, to 1,558.71. The Nasdaq Composite Index
climbed 25.09 points, or 0.78 percent, to close at 3,254.19.
The Dow is now up 10.7 percent for the year, while the S&P
500 is up 9.3 percent.
Lennar's stock jumped 4.8 percent to end at $43.40, its
highest closing level since June 2007. The PHLX housing sector
index shot up 2.8 percent to 197.17, its highest close
since July 2007.
Shares of Adobe Systems Inc, maker of Photoshop and
Acrobat software, also jumped, a day after the company raised
its full-year adjusted earnings forecast. The stock gained 4.2
percent to $42.46.
Among the day's decliners, shares of FedEx Corp lost
6.9 percent to $99.13, its largest daily percentage drop since
September 2011, after it cut its full-year forecast and reported
a 31 percent drop in quarterly profit due to restructuring costs
and weakness in its air freight express business.
The Dow Jones Transportation Average slipped 0.4
percent, weighed down by FedEx, one of its components.
Volume was roughly 5.9 billion shares traded on the New York
Stock Exchange, the Nasdaq and the NYSE MKT, compared with the
2012 average daily closing volume of about 6.45 billion.
Advancers outpaced decliners on the NYSE by a ratio of about
3 to 1, while on the Nasdaq, 17 stocks rose for every seven that