U.S. stocks rose Wednesday pushing the S&P 500 and the Nasdaq to multiyear peaks and the Dow to yet another record close as a proposed airline merger and a surge in Google Inc.'s (GOOG) shares spurred demand for equities.

The Dow Jones industrial average gained 33.70 points, or 0.28 percent, to end at a record 12,251.71. The Standard & Poor's 500 Index added 3.35 points, or 0.24 percent, to finish at 1,396.57. The Nasdaq Composite Index rose 12.09 points, or 0.50 percent, to close at 2,442.75.

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During the session, the Dow hit a lifetime intraday high at 12,291.73, while the S&P 500 climbed as high as 1,401.35, its highest level in six years, and the Nasdaq jumped to 2,452.56, its highest mark in almost six years.

But the three major U.S. stock indexes ended sharply off the session's best levels after minutes from the Federal Reserve's recent policy-setting meeting said cutting inflation was the central bank's greatest concern.

Shares of airline stocks rose after US Airways Group Inc. (LCC) unveiled an $8 billion takeover bid for bankrupt Delta Air Lines Inc.

The S&P Airlines Index rose 4.6 percent, while US Airways stock soared 16.8 percent, or $8.53, to $59.46 on the New York Stock Exchange.

"If the deal were concluded, you'd probably see more upside bias for the market," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

A sell-off in bank stocks, including Wells Fargo & Co. (WFC), also cut into the session's advance as the yield spread between the two-year and 10-year Treasury notes briefly widened to 20 basis points, marking the deepest inversion since December 2000.

When the yield curve is inverted with longer maturities' yields trading below those of shorter maturities, investors have traditionally interpreted the phenomenon as a sign of an economic downturn or recession. For banks and other lenders, the yield-curve inversion raises funding costs.

"The Fed is talking a bit hawkish and people are starting to take a bit of profits off of that since we've had such a nice run-up," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore.

Credit Suisse said it reinstated coverage of Web search leader Google with an "outperform" rating following the completion of its acquisition of Internet video-sharing company YouTube. It also raised its price target on Google to $600.

Google's stock rose 0.5 percent, or $2.63, to $491.93 on Nasdaq and came within a whisker of the $500 milestone. Google was one of the biggest gainers in the Nasdaq 100 , while news of a possible multibillion-dollar plane order caused Boeing Co.shares to climb and lead the Dow's advance.

Boeing shares ended up 1.6 percent, or $1.34, at $87.08 on the NYSE.

Among the S&P 500's biggest gainers was chip maker Intel Corp. (INTC), which rose after Franco-Italian rival STMicroelectronics said it would withdraw from the flash memory chip market, an area in which Intel competes.

Intel shares gained 2 percent, or 44 cents, to $22.32 on the Nasdaq.

After Goldman Sachs raised its rating on Altria Group Inc. (MO), the stock shot up 1.4 percent, or $1.11, to $82.25 on the NYSE. Altria gave the second-biggest boost to the Dow.

The Philadelphia Keefe Bruyette index of bank stocks slipped 0.3 percent. Shares of Wells Fargo & Co. , the No. 5 U.S. bank, dropped 1.3 percent, or 48 cents, to $36.23 on the NYSE.

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