(AP) — Stocks ended a wobbly day with mixed results Wednesday after the Federal Reserve pledged to keep buying bonds until the economy makes substantial progress from its virus-wracked state. The S&P 500 eked out a gain of 0.2%, even though most stocks in the index fell. The tech-heavy Nasdaq closed at another all-time high, and the Dow Jones Industrial Average fell slightly. The Fed is keeping the accelerator floored on its support for the economy, but investors are more interested in what’s happening across Washington. They want to see Congress reach a deal to deliver another dose of financial support for the economy.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — Stocks are drifting near record levels on Wall Street Wednesday after the Federal Reserve pledged to keep buying bonds until the economy makes substantial progress from its virus-wracked state.

The S&P 500 was 0.3% higher in afternoon trading at 3,706.82 after flipping between small gains and losses immediately following the Fed’s announcement. If it holds that gain, it would surpass its record of 3,702.25 set last week. The Dow Jones Industrial Average was virtually unchanged at 30,199, as of 3:20 p.m. Eastern time, while the Nasdaq composite was 0.6% higher.

The Fed said that it would buy at least $80 billion in Treasurys each month and $40 billion in agency mortgage-backed securities until “substantial further progress” has been made. It also said again that it would keep short-term interest rates at their record low of nearly zero, as it keeps the accelerator floored on its support for the economy.

But investors are more interested in what’s happening across Washington, where Democrats and Republicans in Congress are nearing a deal to deliver another dose of financial support for the economy. A deep partisan divide has stymied such a deal for months, but a rush of recent momentum has hopes rising that a compromise could be sealed soon on Capitol Hill to send direct payments of perhaps $600 to most Americans, among other things.

Economists, investors and even Fed officials have been saying such support is crucial, because the Fed’s tools alone can help the economy only so much.

The lower interest rates ushered in by the Fed can help goose home prices and Wall Street, for example, but they can’t replace the paychecks lost by workers whose businesses have shut because of the pandemic.

The stakes are rising by the day for Congress to act. A report released Wednesday morning showed that retail sales sank 1.1% last month. It’s the second straight month of weakness, a much worse showing than the 0.3% decline that economists expected and the latest evidence that the renewed wave of coronavirus infections is ripping more chunks out of the economy.

Restaurants posted particularly sharp declines in sales, and the numbers may get only works. Just this week, restaurants in New York City were limited to outdoor dining, even as colder temperatures and snow arrive.

Governments around the country and world are bringing back varying degrees of restrictions on businesses to slow the spread of the virus.

Fed Chair Jerome Powell said a full recovery likely won’t happen until people feel safe enough to go back to normal activity.

If Congress can indeed reach a deal, it could help carry the economy through what’s expected to be a bleak winter, before one or more coronavirus vaccines can help the economy get closer to normal next year.

So far, Pfizer and partner BioNTech’s coronavirus shots have gained emergency approval and are already being given to key health care workers.

The Food and Drug Administration has given a second vaccine a positive analysis, and the candidate developed by Moderna could be on a path to approval this week.

Distribution of vaccines to the wider population will likely take months, but more vaccines on the market will speed up the process and put the economy on a path to normalcy sooner.

“If markets can continue to look forward, that clearly bodes well,” said Jeff Buchbinder, equity strategist at LPL Financial.

While the long-term view for the economy and markets remains positive, investors are likely in for more volatility in the coming months.

“We could be in for a choppy January and February until we can get more people inoculated and really put this pandemic to bed,” Buchbinder said.
In the bond market, Treasury yields initially climbed following the Fed’s afternoon announcement, but they quickly receded. The yield on the 10-year Treasury was holding steady at 0.91% after climbing to 0.94% shortly after the Fed’s announcement.

Bitcoin, the world’s largest cryptocurrency, topped $20,000 for the first time.

Investors also have been encouraged by signs that the European Union and United Kingdom may finally broker a trade deal following the UK’s departure from the bloc. Germany’s DAX rose 1.5% and France’s CAC 40 gained 0.3%. The FTSE 100 in London rose 0.9%

Asian markets ended higher.