Dow scores biggest gain of 2014 on Fed minutes

The whipsaw ride on Wall Street continued Wednesday as the Dow Jones industrial average scored its biggest gain of the year when the release of the minutes of the Federal Reserve's September meeting showed little change from its previous statements.

After stocks trading fairly quietly through the early part of the day, the 2 p.m. ET release of the Fed minutes sparked a powerful rally that by the close had the Dow, Standard & Poor's 500 index and Nasdaq composite index finishing with gains ranging from 1.6% to 1.9%.

The Dow jumped 274.83 points, or 1.6%, to 16,994.22 -- erasing all of a 273-point dive Tuesday that dropped the blue-chip average to its lowest level since mid August. That was the Dow's biggest jumped since a 293-point surge on Dec. 18, 2013.

The S&P 500 was up 33.79 points, or 1.8%, to 1968.89 and the Nasdaq gained 83.39 points, or 1.9%, to 4468.59.

In its statement, the Fed as expected said that it planned to end its market-friendly bond-buying program, called quantitative easing, after this month.

The Fed has been purchasing Treasury and mortgage-backed securities to keep long-term interest rates low. The Fed also showed no inclination to increase the key federal funds rate, currently near zero. In its statement, the Fed said that it plans to keep the fed funds rate at its current level for a "considerable time" after its bond-buying program ends.

The Fed minutes were the first big potential concern on Wall Street's schedule today. Act two came after the close with the unofficial start to third-quarter earnings season with results from Alcoa. The aluminum giant also didn't deliver any bad news, when its third-quarter earnings jumped 71% and easily topped analysts' estimates.

The strong performance in the U.S. reversed a trend of losses in major markets elsewhere around the globe. European markets ended lower and Germany's DAX shed 1% to below 9000. That is a sharp turn from June when it crossed above the 10,000 mark for the first time and means the stock index for Europe's largest economy now is more than 10% below its high and therefore in correction territory. Before that, Japan's Nikkei 225 index fell more than 1% and stocks in Hong Kong dropped 0.5%.

Before the Fed minutes release, U.S. stock indexes were largely unchanged as investors digested the latest economic news. Wage growth is picking up more rapidly than government reports show, according to new data from top payroll processor ADP, suggesting that the economic recovery may be more robust than believed. Hourly pay for private-sector workers was up 4.5% in the third quarter compared to a year ago, a new ADP report reveals, much higher than the 2% annual growth reported by the Bureau of Labor Statistics.

Wednesday's welcome bounce might have erased the pain of Tuesday's plunge, but the U.S. market still is in relatively precarious state following a turbulent period that still has Dow down 1.7% from its record close on Sept. 19. The slide has come on big volatility. Since its peak, the Dow has suffered nine triple-digit moves, and five of those were on the downside.

Contributing: Paul Davidson, Kim Hjelmgaard.