Stocks higher as Fed divided on rate hike timing

Stocks closed higher Wednesday after the release of minutes from the Federal Reserve's meeting in March showed policymakers were divided on the timing of the first interest rate hike.

The minutes of the Fed's March 17-18 meeting showed a divergence of opinion as several policymakers said last month the central bank is likely to raise its benchmark interest rate in June but "others" said the move will probably occur "later in the year," according to minutes of the Fed's March 17-18 meeting.

The report is consistent with Fed policymakers' forecasts, released after the mid-March meeting, that indicate the first bump in rates since 2006 is unlikely before September as the Fed awaits signs of a pickup in anemic inflation.

The Dow Jones industrial average rose 28 points, or 0.2%, to 17,903 and the Standard & Poor's 500 index gained 6 points, or 0.3%, to 2082. The tech-heavy Nasdaq composite index rose 41 points, or 0.8%, to 4951.

Energy stocks and the oil industry were in sharp focus as oil prices plunged on a build-up in U.S. inventories and a $70 billion oil merger was announced.

In one of the largest corporate deals of the year, Royal Dutch Shell (RDS.A) agreed to buy Britain's BG Group (BRGYY) for $70 billion in cash and stock.

U.S. benchmark crude fell 6% to close at $50.42 a barrel in New York after the Energy Information Administration reported a larger-than-expected increase in oil stockpiles last week. Energy stocks took a hit as Chevron (CVX) dropped 1.7% and ExxonMobil (XOM) fell 2%.

Expectations for a weak earnings season added pressure to stocks. First-quarter earnings season kicked off after the market close as Alcoa posted earnings that beat estimates but revenue fell short.

Wall Street analysts expect profits for S&P 500 companies to contract 2.8%, which would mark the first year-over-year earnings drop since the third quarter of 2009, according to earnings tracker Thomson Reuters I/B/E/S.

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Overseas, Asian markets jumped as Japan's central bank maintained its expansively easy monetary policy. Japan's Nikkei 225 index rose 0.8% to close at 19,789.81, near a 15-year high, and Hong Kong's Hang Seng index surged 3.8%. The Shanghai Composite rose 0.9%.

European markets were lower: Britain's FTSE 100 was down 0.4% while France's CAC 40 slipped 0.3%. Germany's DAX dropped 0.7%.

Contributing: Paste BN's Paul Davidson, Associated Press