Last Updated Oct 8, 2014 3:13 PM EDT
NEW YORK - The U.S. stock market moved sharply higher Wednesday as investors reacted to the minutes from the Federal Reserve's latest policy meeting, which showed that the Fed is reluctant to raise interest rates any time soon.
The Dow Jones industrial average rose 197 points to 16,917 as of 3:01 p.m. ET. The Standard & Poor's 500 index rose 23 points to 1,958 and the Nasdaq composite rose 64 points to 4,449. Indexes had meandered between slight gains and losses earlier in the day, then turned higher after the Fed released its minutes at 2:00 p.m.
Federal Reserve officials agreed last month that they would begin raising interest rates only when measures of the economy's health and inflation signaled the time was right, moving away from a specific date or period. The Fed sees inflation remaining low for the next few years. Investors like low interest rates since they keep borrowing costs low for businesses and individuals, encouraging spending and investment.
Investors had been worried about the future of global economic growth after the IMF cut its outlook for this year and next, citing weaker economic activity in Japan, Latin America and Europe. The IMF expects the global economy will grow 3.3 percent this year, slightly below what it forecast in July. Earlier this week Germany said its industrial output fell 4 percent in August, far more than expected.
"I think the U.S. economy could be protected from Europe for a quarter or two, but will start hurting us here eventually," said J.J. Kinahan, chief strategist at TDAmeritrade.
Financial markets in Europe tumbled yet again due to economic growth worries across the continent. Germany's DAX fell 1 percent, France's CAC-40 lost 1 percent. The U.K.'s FTSE 100 fared a bit better, falling only 0.2 percent.
Oil prices fell sharply Wednesday, bringing U.S. crude oil to its lowest price since April 2013. Oil prices are highly susceptible to global economic demand, so if the global economy is slowing down in places like Europe and Asia, that will push crude oil lower. Oil was down $1.41, or 1.6 percent, to $87.44.
Energy stocks lagged the rest of the market, particularly energy companies who focus on off-shore drilling. Nabors Industries, Halliburton, Ensco and Williams Companies were all down roughly 3 percent each.
Aluminum company Alcoa will report its quarterly results after the closing bell Wednesday. Traditionally Alcoa marks the start of Wall Street's quarterly earnings season, but most of S&P 500 companies will not report for another week or so. Analysts are looking for Alcoa to report a profit of 22 cents a share, according to FactSet. Alcoa was down 14 cents, or 1 percent, to $15.80.
Sears Holdings, the parent company of Sears and K-mart, dropped $2.60, or 8 percent, to $28 following news reports that the company's vendors have started to halt shipments to the retailer. Sears has struggled for several months and has been selling off assets to raise cash to pay for its expenses.