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Wall Street's rally holds after Fed's rate decision

By msnbc.com news services

Stocks rebounded after two days of losses on Wednesday, aided by upbeat job market data and a slightly optimistic economic outlook from the Federal Reserve.

The Dow Jones industrial average was lately up over 170 points, having jumped as much as 219 points earlier in the session.

The Fed left interest-rate policy on hold after its policy meeting Wednesday and offered a moderately brighter economic outlook, but the Fed also flagged risks to growth that appeared to leave open the door for further easing.

In a news conference Wednesday afternoon, Federal Reserve Chairman Ben Bernanke offered insights into the Fed’s view of the economy. He said he is dissatisfied with its performance:

“As I've said before, I understand that many people are dissatisfied with the state of the economy,” he said. “I'm dissatisfied with the state of the economy. Unemployment is far too high. Inequality, which is not a new phenomenon -- increases in inequality have been going on for at least 30 years -- but as that has continued, we have a more unequal society than we've had in the past.”

Europe's financial condition was a wild card for markets as Greek Prime Minister George Papandreou met with French and German leaders to discuss the implementation of the bailout for Greece. Papandreou's call for a Greek referendum on the $178 billion bailout package, now endorsed by his cabinet, sent stocks and the euro tumbling on Tuesday.

Data earlier on Wednesday showed U.S. private employers added more jobs than expected last month. A separate report showed layoffs planned by companies dropped sharply, bolstering the view that the economy is on a path of slow growth.

The energy and financial sectors were among the best performers on Wednesday after having led the market lower in the previous two sessions.

The Associated Press and Reuters contributed to this report.

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