U.S. stocks rose on Monday in the quietest session of the year on speculation that the Federal Reserve would signal potential steps to boost the sluggish economic recovery.

Volume was a mere 5.71 billion shares, compared with last year's estimated daily volume of 9.65 billion shares, as investors were wary of taking new positions before the Fed's statement on Tuesday.

A selloff in shares of Hewlett-Packard limited the Dow's gains.

In recent days the market has reacted to the possibility of additional action from the Fed to revive the economy. That talk intensified after Friday's weaker-than-expected jobs report for July.

We're expecting the Fed to officially lay the groundwork for a policy change predicated on another month of economic data, said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

If they actually come out and say they're going to start a new plan tomorrow, it might actually spook the market into believing that things are much worse than we thought.

The central bank could resume purchases of certain debt securities to lower interest rates to encourage borrowing. It could also halt payment of interest on banks' excess reserves to encourage lending.

Stocks have generally reacted well on Fed days since the zero-interest rate policy was put in place in December 2008. The S&P 500 is up 85 percent of those days, with average gains of 1.18 percent, according to Bespoke Investment Group of Harrison, New York.

But Bespoke wrote that because the Fed is expected to make changes in its comments, trading following tomorrow's statement could prove to be more volatile than recent announcements.

The Dow Jones industrial average <.DJI> was up 45.19 points, or 0.42 percent, at 10,698.75. The Standard & Poor's 500 Index <.SPX> was up 6.15 points, or 0.55 percent, at 1,127.79. The Nasdaq Composite Index <.IXIC> was up 17.22 points, or 0.75 percent, at 2,305.69.

The U.S. central bank is expected to release its statement at 2:15 p.m. (1815 GMT) on Tuesday.

Hewlett-Packard Co was by far the top drag on the Dow, tumbling 8 percent to $42.60 after Chief Executive Mark Hurd resigned late on Friday. The news of his resignation, following an investigation into sexual harassment charges by a female contractor, sent the company's shares down 10 percent in extended trade on Friday.

Among rising stocks, McDonald's Corp hit a lifetime high at $73.33 after it reported July sales data that was stronger than expected, though the stock later pared gains to end at $72.92, up 1.6 percent.

McDonald's sales could prove somewhat troubling in the future if consumers are still going for discounts rather than spending at higher-end places, said Paul Nolte, managing director at Dearborn Partners in Chicago.

The Nasdaq got a boost from Research in Motion Ltd

, whose U.S.-listed shares rose 3.5 percent to $55.31. Earlier, a Saudi official said the BlackBerry maker and Saudi mobile firms were testing three servers to send communications and data through Saudi Arabia before Canada to address Riyadh's concerns over security.

Goldman Sachs cut its year-end target for the S&P 500 index to 1,200 from 1,250, reflecting a lower U.S. growth forecast.

The weak GDP growth forecast and specter of deflation mean top-line sales increases will be hard to achieve, the firm wrote to clients.

Advancing stocks outnumbered declining ones on the New York Stock Exchange by a ratio of about three-to-one. On the Nasdaq, about two stocks rose for every one that fell.

(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)