Dow hits new high ahead of Fed announcement

JeeYeon Park , CNBC ? ? ? 3 hrs.

Stocks jumped at the open Wednesday, with the Dow hitting a fresh record and the S&P 500 resuming the march to its all-time high, as investors shifted their attention from worries over Cyprus and looked ahead to the Federal Reserve's policy meeting announcement later this afternoon.

Model N surged nearly 30 percent in its market debut on the NYSE after the software maker priced 6.7 million shares at $15.50, above the expected $12.50 to $14.50 range. The company trades under the symbol "MODN."

The Dow Jones Industrial Average rallied, led by Disney and Pfizer, after squeezing out a small gain in the previous session.

The S&P 500 and the Nasdaq also jumped. The S&P 500 is within 10 points of hitting its all-time closing high. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, tumbled below 13.

All key S&P sectors were in positive territory, led by consumer discretionary and health care.

After a two-day meeting, the Fed is due to the release its monetary policy statement later this afternoon, as well as its economic forecasts. The news will be followed by a press briefing with Fed Chairman Ben Bernanke.

Investors will be looking for any signs that the central bank could start winding down its quantitative easing program. It is expected to keep monetary policy unchanged this month however, continuing its super low rates policy and its $85 billion a month in asset purchases. Fed watchers expect it to stick with its program until the middle of next year, according to CNBC's Fed survey.

"We expect improvement in the labor market over the coming quarters to initiate a slowdown in the Fed's pace of balance sheet expansion in the fourth quarter of this year. This would mark the beginning of the process towards the first Fed funds rate hike but we do not expect the Fed to hike rates before the first quarter of 2015," according to a note from Danske Bank.

European markets moved into positive territory as investors watched to see if Russia, rather than Europe, would come to the aid of Cyprus. Lawmakers in Cyprus overwhelmingly voted against a controversial EU bank bailout deal on Tuesday.

(Read More: Don't Count Cyprus Out of the Euro Just Yet: Traders)

Cyprus's finance minister Michael Sarris who is in Moscow for talks with Russia told CNBC that the country was now "looking beyond" extending an existing loan agreement with Russia, prompting speculation that Russia could come to Cyprus's financial aid.

On the economic front, weekly mortgage applications fell for a second week as interest rates climbed to seven-month highs, according to the Mortgage Bankers Association.

Apple dipped near $500 a share after Canaccord Genuity cut its target price on the iPhone maker to $600 from $650.

Among earnings, FedEx slumped after the package-delivery company posted lower-than-expected earnings due to weakness in its air express business.

Adobe Systems rallied to lead the S&P 500 gainers after the computer software maker lifted its full-year earnings forecast and posted better-than-expected quarterly results. Separately, the company announced its chief technology officer Kevin Lynch will leave to take a job at Apple. At least three brokerages raised their price target on the company.

Lennar edged higher after the homebuilder reported earnings that exceeded Wall Street estimates as lower interest rates and rising rents increased home sales.

General Mills slipped after the cereal maker forecast a decline in earnings. Still, the company posted a higher-than-expected profit.

Oracle and Jabil Circuit are among notable companies scheduled to post earnings after the closing bell. (Read More: A Peek Into Oracle's Future)

Best Buy climbed after Credit Suisse reinstated its coverage on the company with an "outperform" rating.

Zynga plunged after BofA Merrill cut its rating on the social game services company to "neutral" from "buy."

?By CNBC's JeeYeon Park (Follow JeeYeon on Twitter:@JeeYeonParkCNBC)

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Source: http://www.nbcnews.com/business/dow-hits-new-high-ahead-fed-announcement-1C8960837

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