By Matt Jarzemsky

U.S. stocks extended gains after the release of Federal Reserve meeting minutes that market participants described as largely in line with expectations.

The Dow Jones Industrial Average added 74 points, or 0.4%, to 16980 in midafternoon trading. The blue-chip benchmark rose to session highs--up from an earlier gain of about 48 points--after the minutes were released.

The S&P 500 index rose seven points, or 0.4%, to 1972. The Nasdaq Composite Index gained 27 points, or 0.6%, to 4419.

Federal Reserve officials agreed at their June policy meeting to end the central bank's bond-buying program by October, but didn't give any clear signal on a rate increase, according to the central bank's meeting minutes released Wednesday.

Investors focused on the absence of any clear signal on rate increases. Many said the market had expected the central bank to stop bond purchases by year-end, so the announcement of the October end date was no surprise.

Treasury bonds rose following the Fed minutes, pushing yields lower. The dollar weakened against the euro, and gold held gains posted during its regular trading session.

"I don't think there's a whole lot of surprise out of anything that was coming out of the minutes," said Brett Mock, managing director at brokerage firm JonesTrading Institutional Services LLC.

"If you look at the behavior going on or what people are saying on the investment side is they'd still be buyers on any pullback," Mr. Mock said. "There's really no change yet where they want to be selling things."

Money managers have been following the Fed's every move for clues on interest rates. Market participants widely believe the Fed's accommodative stance has helped fuel stock indexes' advance to record highs.

But signs of an improving economy have some watching closely for a change in the central bank's tone. The U.S. economy created 288,000 nonfarm payrolls in June, while the unemployment rate fell to 6.1%, the lowest level since September 2008. That data, which exceeded economists' projections, prompted speculation that a rate increase could come sooner than expected.

Meanwhile, fund managers are also looking to the just-starting corporate earnings season for confirmation that companies' economic health justifies their recent share-price appreciation.

"The U.S. market is the market where earnings have been consistently growing," said Michael Strauss, chief investment strategist at Commonfund, which oversees about $25 billion and has maintained a bullish stance toward U.S. stocks in recent years. "I'd much rather be investing in sectors, or industries or companies that are making money."

When it comes to valuations, with stocks near record highs, he added, "are we as excited about equities as we were two years ago? No. But we still like equities here more than we like traditional fixed income."

Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com

(END) Dow Jones Newswires

July 09, 2014 15:06 ET (19:06 GMT)

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