Updated 12:35 p.m. ET

Stocks rallied immediately after the Federal Reserve Open Market Committee announced it would keep rates low until mid-2015 and launch a third round of quantitative easing. The Fed is launching a bond-buying program to purchase mortgage-backed securities by $40 billion a month.

The Dow Jones Industrial Average ($INDU) was up 61 points at 13,394. The S&P 500 ($INX) was up 6 points at 1,443. The Nasdaq Composite ($COMPX) was up 13 points at 3,127.

The Fed wraps up its meeting Thursday and will announce its policy decision at 12:30 p.m. ET. A news conference with Fed Chairman Ben Bernanke is scheduled for 2:15 p.m. ET.

Bernanke is widely expected to announce further monetary stimulus measures. Economists and investors expect the Fed to embark on a third round of quantitative easing through large-scale asset purchases. In addition, investors will listen closely to Bernanke's language to get a better idea of what policymakers are thinking.

Jobless claims rise sharply
The number of people who applied for U.S. unemployment benefits jumped by 15,000 in the week ended Sept. 8 to stand at 382,000. That's the highest level since mid-July and higher than the 369,000 economists had expected, according to Briefing.com. The reason for the sharp jump is mainly the 9,000 delayed claims filed by people affected by Tropical Storm Isaac.

Still, claims have barely changed in the past month, indicating a sluggish U.S. labor market and little job creation. Although layoffs have fallen to exceedingly low levels, companies are not hiring much. The Labor Department also revised up claims from two weeks ago to 367,000 from an initial reading of 365,000.

Wholesale inflation rises most in 3 years
Meanwhile, U.S. wholesale prices jumped a seasonally adjusted 1.7% in August, mainly because of higher fuel prices, the Labor Department said. Economists had expected an increase of 1.2%, according to Briefing.com. In July, PPI rose by 0.3%.

Excluding food and energy prices, which tend to be more volatile, core wholesale prices rose only 0.2%, in line with economists' expectations, according to Briefing.com. The energy index surged 6.4%, and the wholesale cost of food rose a sharp 0.9%.

While wholesale prices rose last month, companies may find it hard to pass the increases on to consumers because of the tepid global economy, meaning consumer prices may not have been affected as much. Higher inflation could impact the Fed's stimulus policies. So far, consumer inflation has been below the Fed's target rate of 2%. August CPI is due out Friday.

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U.S. and global stocks closed generally higher Wednesday after a key ruling by the German court that could have affected the European Central Bank's ability to assist struggling eurozone countries. On Thursday, however, Asian and European stocks were mostly lower as investors took a cautious approach ahead of the Fed's announcement.

Stocks to watch
Apple (AAPL) remains in focus a day after it introduced the iPhone 5. Several analysts raised their forecasts for iPhone sales. They also raised their forecasts for Apple's share price by as much as $60, to between $750 and $820.

Home furnishings retailer Pier 1 Imports (PIR) posted a 58% jump in fiscal-second-quarte​r earnings and raised its full-year earnings guidance.

Britain's BAE Systems and Airbus-owner EADS said they are in advanced talks to create an industry giant that would overtake rival Boeing (BA) in sales and contend with defense cutbacks in Europe and the U.S. But investors, Bloomberg reports, are far from impressed, concerned that the proposed merger would struggle to deliver cost savings and penetrate the key U.S. defense market.

Citigroup analysts downgraded semiconductor makers Intel (INTC), AMD (AMD) and Marvell (MRVL), saying they see little catalysts for PC related stocks.