Stocks initially dropped after the Commerce Department said orders for durable goods plunged 2.8 percent in May following three months of increases. But the market later shrugged off the report and clawed its way back up, boosted by some takeover deals and strong earnings reports, particularly from ConAgra Foods Inc. and software maker Oracle Corp.

Given the market's turbulence over the past few weeks due to soaring bond yields, investors will be looking for any clues in the central bank's statement Thursday about policy makers' views on growth and inflation.

The Fed, which is expected to keep the benchmark rate steady at 5.25 percent, has stated recently that it expects the economy to recover from a weak first quarter despite difficulties in the housing market, and that inflation remains a paramount concern.

"We'd like to hear a Fed that's much closer to the center, because they're still pretty hawkish. They sound closer to tightening than to easing," said Arthur Hogan, chief market analyst at Jefferies & Co. Rate hikes tend to slow down business and can dampen corporate profits.

According to preliminary calculations, the Dow rose 90.07, or 0.68 percent, to 13,427.73, after dropping 77 points earlier in the day.

Broader indexes also rose. The Standard & Poor's 500 index gained 13.48, or 0.90 percent, to 1,506.38, and the Nasdaq composite index jumped 31.19, or 1.21 percent, to 2,605.35.

Treasury bond prices finished slightly lower despite the weak durable goods data, pushing the 10-year Treasury note's yield up to 5.10 percent from 5.09 percent late Tuesday.

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