By Caroline Valetkevitch
NEW YORK (Reuters) - The Dow closed at its first record high of 2014 on Wednesday after the Federal Reserve gave an upbeat view of the economy's prospects as it announced another cut to its massive bond-buying program.
Investors brushed aside data showing weak first-quarter economic growth, which was tied to the severe winter that hampered exports and hit investment spending.
The Fed said in a statement it would reduce its monthly bond purchases to $45 billion from $55 billion, as expected. That will keep it on track to end the program as soon as October.
That the Fed looked past a dismal reading on first-quarter growth reinforced the view that weather was to blame for the weakness, analysts said.
"They are seeing some economic activity pick up after the slowdown during the winter," said Joe Bell, senior equity analyst at Schaeffer's Investment Research in Cincinnati. That "is one positive sign."
Nine of the 10 S&P 500 sectors ended in the black, led by the economically-sensitive S&P materials sector <.SPLRCMA>, up 0.8 percent. Exxon Mobil , up 0.9 percent at $102.41, led gains on the S&P 500.
The Dow Jones industrial average <.DJI> rose 45.47 points or 0.27 percent, to 16,580.84, a record high close. It was the first record close of the year for the Dow.
The S&P 500 <.SPX> gained 5.62 points or 0.3 percent, to 1,883.95 and the Nasdaq Composite <.IXIC> added 11.013 points or 0.27 percent, to 4,114.556.
For the month, the Dow and S&P 500 posted slight gains, while the Nasdaq dropped 2 percent following weeks of heavy selling in tech and biotech "momentum" stocks. The Dow was up 0.7 percent in April; the S&P 500 was up 0.6 percent.
Stocks were near steady for most of the session, then slowly edged to session highs following the Fed announcement.
EBay was among the biggest negative influences on both the S&P 500 and Nasdaq. Its shares fell 5 percent to $51.83, a day after it forecast lower-than-expected earnings this quarter.
Twitter shares fell 8.6 percent to $38.97 and hit a record intraday low of $37.25, a day after posting lackluster user and usage growth.
Early in the session, data showed gross domestic product expanded at a 0.1 percent annual rate in the first quarter, the slowest since the fourth quarter of 2012, as exports and inventories weighed, but activity already appears to be bouncing back.
In another report, however, U.S. private employers beat expectations by adding 220,000 workers in April, the most since November, and gains in the prior month were revised up.
After the bell, shares of Yelp Inc , the operator of consumer review website Yelp.com, rose 4 percent to $60.67 as it reported a 66 percent rise in quarterly revenue.
About 6.8 billion shares changed hands on U.S. exchanges, above the 6.6 billion April average, according to data from BATS Global Markets.
(Editing by Bernadette Baum and Nick Zieminski)