Stocks edge higher

Associated Press

NEW YORK

U.S. stock indexes inched further into record territory Wednesday after AT&T, Boeing and others joined the parade of big companies reporting stronger profits than analysts expected. Stocks that pay big dividends were particularly strong after the Federal Reserve took a pause in its slow-moving campaign to lift interest rates, as Treasury yields sank lower.

While announcing its decision to hold short-term rates steady, the Federal Reserve said that it may begin paring the massive $4.5 trillion balance sheet it built up following the financial crisis “relatively soon,” which some analysts took to mean as September. The Fed also said that inflation looks to remain below its target of 2 percent in the near term.

After the Fed’s announcement, drops for Treasury yields accelerated, and the 10-year yield fell to 2.29 percent from 2.33 percent late Tuesday. The two-year yield sank to 1.35 percent from 1.39 percent.

Lower bond yields make the dividends paid by stocks more attractive, and the biggest dividend payers picked up momentum after the Fed’s announcement. Utility stocks in the S&P 500 climbed 0.9 percent, for example, more than doubling their gain after the Fed’s decision.

The best-performing area of the market was the telecom sector, which jumped after AT&T reported stronger second-quarter earnings than Wall Street had forecast.