Stocks keep riding high

NEW YORK (CNNMoney.com) -- Subsiding credit market concerns and upbeat earnings from tech bellwether Cisco sent stocks higher Wednesday.

The tech-heavy Nasdaq Composite index (up 45.69 to 2,607.29, Charts) led the charge, gaining nearly 1.7 percent two hours into the session.

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The Dow Jones industrial average (up 96.33 to 13,600.63, Charts) rose about 0.6 percent while the broader S&P 500 (up 15.78 to 1,492.49, Charts) rose 1.1 percent.

"I think what we are seeing is a little relaxing of fears about the credit contagion spreading in a broader way," said Fred Dickson, chief market strategist at D.A. Davidson & Co. "The Fed's action to take no action was sort of a backhanded reinforcement of that idea."

Federal Reserve officials left a key short-term interest rate unchanged at their policy meeting Tuesday, leaving interest rates unchanged at 5.25 percent where it has remained since last summer.

Investors speculated prior to the meeting that tougher conditions in the credit markets, which have roiled stocks recently, would come to the rescue by cutting interest rates.

Instead, their accompanying statement, which was scrutinized by Wall Street, suggested that the Fed wasn't panicking about the turmoil in the credit markets, but that inflation remained its main concern.(Read the Fed statement).

Investors around the world have been rattled by signs of tougher conditions in credit markets, since tighter credit could raise the cost of borrowing for companies, hurting corporate earnings and slowing the recent buyout boom.

Stocks got a lift at the start of Wednesday's session from the tech sector as Cisco Systems (Charts, Fortune 500) reported higher-than-expected earnings late Tuesday on stronger quarterly sales. Shares of the computer networking company climbed 5.4 percent in midday trade on the Nasdaq.

Sprint Nextel (Charts, Fortune 500), the No. 3 U.S. wireless service, posted lower quarterly profit on Wednesday but beat analysts' average forecast as it added new subscribers.

Luxury home builder Toll Brothers (Charts) issued a revenue warning Wednesday, troubling investors about a deepening crisis in the U.S. housing market.

McDonald's (Charts, Fortune 500), the world's largest fast-food chain, reported a strong 6.5 percent jump in its global sales in July, helped by the addition of new breakfast menu items.

Burlington Northern Santa Fe Corp. (up $2.43 to $83.68, Charts, Fortune 500) shares climbed nearly 3 percent after Warren Buffett's Berkshire Hathaway (up $510.00 to $113,200.00, Charts, Fortune 500) revealed it increased its stake in the railroad firm.

The markets opened as scheduled despite disruptions of the New York transportation system due to severe weather.

Oil prices retreated on a surprise decline in gasoline inventories in the weekly U.S. inventory report. U.S. light crude for September delivery fell 31 cents to $72.11 a barrel on the New York Mercantile Exchange.

Treasury prices fell, lifting the yield on the benchmark 10-year note to 4.84 percent, up from 4.77 percent late Tuesday. Bond prices and yields move in opposite directions.

The dollar eased against the euro and climbed versus the yen.

COMEX gold for December climbed $4.70 to $687 an ounce.

In overseas trading, both European and Asian markets finished higher.