Stocks rose on Tuesday, as investors bet the U.S. Federal Reserve will stick to its accommodative policy to foster economic recovery, boosting growth-sensitive sectors such as financials, technology and industrials.
The gains were broad-based, with all but three of the 10 S&P 500 industry sectors ending higher. Energy and other natural resources stocks were underpinned by resurgent global commodity prices as the U.S. dollar retreated.
The Federal Reserve began a two-day policy-setting meeting on Tuesday. Its policy statement is due on Wednesday around 2:15 p.m. EDT.
With no change expected in interest rates, investors probably will focus on the bank's assessment of the economic outlook, particularly after Chairman Ben Bernanke said last week that the recession was technically over.
Bernanke's research will have him staying the course here, in an accommodative fashion for a bit longer, and I think the market very much believes that and is trading off of that, said Dean Curnutt, president of Macro Risk Advisors, an equity derivatives strategy and execution brokerage, in New York.
Ultimately, the extent to which the Fed is accommodating this market needs to be unwound, and we'll see if we hear more on that tomorrow. Our sense is that there will not be a tremendous amount of information on that topic.
The Dow Jones industrial average <.DJI> gained 51.01 points, or 0.52 percent, to end at 9,829.87. The Standard & Poor's 500 Index <.SPX> rose 7.00 points, or 0.66 percent, to 1,071.66 -- a fresh 11-month closing high. The Nasdaq Composite Index <.IXIC> climbed 8.26 points, or 0.39 percent, to 2,146.30.
The S&P 500 has risen 58.4 percent since hitting a 12-year closing low on March 9.
CITIGROUP CLIMBS, AIG SLIDES
Among financials, Citigroup
Bank of America
The S&P 500 financial index <.GSPF> was up 2.3 percent.
But insurer American International Group
On the technology front, Google Inc
On Tuesday morning, Canaccord Adams technology analyst Jeff Rath raised his price target on Google's stock to $560 from $480, saying, Our recent checks suggest that ad budgets are coming back, particularly in e-commerce. He rates the stock a buy.
Carnival Corp & Plc
Among industrials, Caterpillar Inc
Among commodity plays, Newmont Mining
Investors have scrutinized auction results closely this year, especially after worries surfaced back in May about the longevity of the United States' prized AAA credit rating.
The U.S. dollar's slide to a one-year low against the euro helped propel global commodity prices higher, with U.S. front-month crude up 2.6 percent, or $1.84, to settle at $71.55 a barrel, while spot gold rose toward an 18-month high approaching $1,020 an ounce.
Volume was moderate, with about 1.27 billion shares changing hands on the New York Stock Exchange, compared with last year's estimated daily average of 1.49 billion. On the Nasdaq, about 2.51 billion shares traded, above last year's daily average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 5 to 2, while on the Nasdaq, about five stocks rose for every four that fell.
(Editing by Jan Paschal)