March 20 (Bloomberg) -- U.S. stocks rose, snapping a three- day decline in the Standard & Poor’s 500 Index, as the Federal Reserve will keep up its bond buying to stimulate the economy and euro-area leaders weighed options for Cyprus.
Adobe Systems Inc. climbed 4.2 percent as the software maker reported sales and profit that exceeded analysts’ estimates. BlackBerry added 8.5 percent after Morgan Stanley raised its rating on the Canadian smartphone maker. Lennar Corp. gained 5.7 percent after posting first-quarter earnings that beat projections. FedEx Corp. slumped 6.9 percent as it lowered its 2013 earnings forecast amid a widening customer shift to cheaper overseas shipments.
The S&P 500 advanced 0.7 percent to 1,559.46 at 3:16 p.m. in New York, trading within six points of its record reached in 2007. The Dow Jones Industrial Average rose 68.82 points, or 0.5 percent, to 14,524.64. Trading in S&P 500 stocks was 6.6 percent below the 30-day average during this time of day.
"The Fed essentially did what’s to be expected, which is to reinforce that the economy still needs support," Hank Herrmann, Overland Park, Kansas-based chief executive officer of Waddell & Reed Investment Management Co., said in a phone interview. His firm manages $103 billion. "Cyprus just reminds us all the fragility of the economic circumstances in Europe. As you look at the economic data, pretty much everywhere outside the U.S. has been equally unconvincing in terms of any kind of expansion."
More than three years into the expansion, the central bank led by Chairman Ben S. Bernanke is pressing on with open-ended purchases of Treasury and mortgage securities to boost the pace of growth and heal a labor market still scarred by the deepest recession since the Great Depression.
The S&P 500 has surged 131 percent from a 12-year low in 2009 as companies reported better-than-estimated earnings and the Fed embarked on three rounds of bond purchases to stimulate the economy. The benchmark index rose to within two points of its 2007 record last week while the Dow hit an all-time high.
The Federal Open Market Committee, at the conclusion of a two-day meeting in Washington, left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation is projected to be no more than 2.5 percent.
Policy makers lowered their expectations for the unemployment rate at the end of the year to a range of 7.3 percent to 7.5 percent, from a previous forecast of 7.4 percent to 7.7 percent. The economy will expand 2.3 percent to 2.8 percent this year, they estimate, compared with their earlier forecast of 2.3 percent to 3 percent growth.