NEW YORK (REUTERS) - The S&P 500 finished a volatile session nearly flat on Wednesday after the Federal Reserve gave no hint that a reduction in the pace of its bond-buying program is imminent.

After paring most of the day's gains just before the close, the S&P 500 ended July up 5 per cent - its best monthly percentage increase since January.

In a statement following its two-day policy meeting, the Fed said the economy continues to recover but still needs support.

Stocks mostly extended gains following the Fed's statement, led by S&P indexes tracking consumer discretionary, energy and other growth sectors. The S&P consumer discretionary index ended up 0.5 per cent.

At the same time, dividend-paying stocks such as utilities slipped. The S&P utility index slid 0.7 per cent.

"The Fed continues to try to talk down the concerns of kind of a premature taper. In fact, there were even tones in this piece that were a little disinflationary," said Mr Burt White, chief investment officer of LPL Financial in Boston.

The Fed's stimulus has been credited by many as central to the S&P 500's gain of 18.2 per cent so far this year.

Federal Reserve Chairman Ben Bernanke jolted markets in late May by saying the central bank planned to ease back on its stimulus efforts once the economy improves.

Late in the session, shares of J.C. Penney sank 10.2 per cent to $14.60 after commercial lender CIT Group stopped supporting deliveries from smaller manufacturers to the retailer, according to a New York Post report. The stock was the S&P 500's biggest percentage loser.

The Dow Jones industrial average slipped 21.05 points, or 0.14 per cent, to end at 15,499.54. The Standard & Poor's 500 Index dipped 0.23 of a point, or 0.01 per cent, to finish at 1,685.73.

In contrast, the Nasdaq Composite Index rose 9.90 points, or 0.27 per cent, to close at 3,626.37.

The Dow set an all-time intraday high of 15,634.32 early in the session, while the Nasdaq reached a session high of 3,649.35, its highest since late 2000.

All three major United States (US) stock indexes posted healthy gains for the month of July. The Dow rose 4 per cent, the S&P 500 climbed 5 per cent and the Nasdaq gained 6.6 per cent.

The S&P 500 rose to less than 2 points from hitting 1,700, considered a key level of resistance for the market.

The index has struggled to break above the mark, and for 10 straight sessions, it has traded within 10 points of 1,700. A rise above that level could signal that stocks have more room to rise.

In Wednesday's session, the shares of credit card companies ranked among the biggest losers.

Shares of Visa dropped 7.5 per cent to $177.01 and had the biggest negative impact on the S&P 500. Shares of American Express, a Dow component, slid 1.9 per cent to $73.77.

In another milestone set earlier in the session, Facebook Inc's stock traded above its initial public offering price of US$38 for the first time since its market debut in May 2012.

The stock rose as high as $38.31. Facebook closed at $36.80, down 2.2 per cent.

Comcast Corp gave the S&P 500 its biggest boost after the US cable provider posted a higher quarterly profit on Wednesday, as it added more Internet customers than expected on the cable side and booked an increase of more than 20 per cent in operating cash flow at its NBC Universal unit. Comcast's Class A stock rose 5.6 per cent to close at $45.08.