U.S. stocks extend gains as Fed meeting begins

U.S. stocks traded higher in the morning session Wednesday, as Wall Street was eagerly awaiting the outcome of the Federal Reserve's key policy meeting.

By midday, the Dow Jones Industrial Average climbed 91.03 points, or 0.55 percent, to 16,690.88. The S&P 500 increased 11.57 points, or 0.58 percent, to 1,989.66. The Nasdaq Composite Index went up 14.09 points, or 0.29 percent, to 4,874.61.

Investors were keeping a close eye on the Fed's two-day policy meeting beginning Wednesday, as the Federal Open Market Committee (FOMC) could raise interest rates for the first time in nine years. All eyes are on Thursday afternoon's expected statement and press conference.

Uncertainty about the Fed's decision whether or not to hike rates at the meeting has been contributing to recent volatility in the market.

Some analysts believed that the U.S. central bank will not decide to raise interest rates at the meeting as recent economic reports came out generally negative.

On the economic front, the U.S. Consumer Price Index (CPI) for all urban consumers decreased 0.1 percent in August on a seasonally adjusted basis, missing market consensus, the Labor Department reported Wednesday.

The index for all items less food and energy increased 0.1 percent in August, the same increase as in July.

"Outside continued weakness in commodities and energy, inflation is remarkably stable, and has been for years. Unfortunately for policy makers, it is holding stable below their preferred measure," said Jay Morelock, an economist at FTN Financial, in a note.

On Tuesday, U.S. stocks posted solid gains as some investors expected that a batch of soft economic reports could give the Fed an excuse to postpone the rate rise. Endit