The rise in stocks for a second day reassured some investors that Tuesday's huge advance was based on somewhat solid footing and not simply a one-day pop. A mild reading of the Labor Department's August consumer price index, which slipped 0.1 percent, helped reassure investors that the Fed was right to focus on the economy and set aside some of its concerns about inflation. Further, the Commerce Department's report that new home construction fell for the third month in a row in August confirmed that the housing market is still struggling.

Wall Street took comfort from the Fed's move to lower the target federal funds rate to 4.75 percent from 5.25 percent and were able to look past another rise in energy prices. Oil settled at a fresh record Wednesday.

According to preliminary calculations, the Dow Jones industrials rose 76.17, or 0.55 percent, to 13,815.56. While the Dow came off its highs of the session the move higher came a day after the 30-stock index climbed nearly 336 points — its biggest one-day point gain in nearly five years.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 9.25, or 0.61 percent, to 1,529.03. The Nasdaq composite index rose 14.82, or 0.56 percent, to 2,666.48.

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