Stocks jumped on Wednesday, with the Dow and S&P 500 up more than 1 percent, on positive data about the services sector and employment as investors awaited the Fed's assessment of the economic recovery.

Gains were broad-based, with the healthcare sector jumping on hopes the Obama administration's healthcare reforms may be slowed after Republican scored key election wins.

The services sector grew in October for a second straight month, while U.S. companies cut jobs last month at the slowest pace in more than a year.

Specifically, new orders in the ISM services index rose to the highest since October 2007, giving optimism to the market that is looking ahead, said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in New Jersey.

The Dow Jones industrial average <.DJI> jumped 130.59 points, or 1.34 percent, at 9,902.50. The Standard & Poor's 500 Index <.SPX> was up 12.77 points, or 1.22 percent, at 1,058.18. The Nasdaq Composite Index <.IXIC> rose 20.05 points, or 0.97 percent, at 2,077.37.

All eyes are on the statement from the Federal Open Market Committee due at about 2:15 p.m. EST (1915 GMT). The Fed is expected to keep interest rates near zero, and reaffirm that policies supporting the economy will stay in place for some time, even as signs of recovery mount.

Among gainers, Merck & Co Inc was up 5.1 percent at $32.24, and Pfizer Inc
rose 2.2 percent to $17.10 as investors bet that U.S. President Barack Obama's healthcare plans would be slowed.

The Morgan Stanley Healthcare Payor index <.HMO> rose 6.1 percent, and the S&P healthcare index <.GSPA> added 2 percent.

Victories for the Republican party in the Virginia and New Jersey gubernatorial elections translate into a possible block on healthcare reform, said Michael Pento, senior market strategist at Delta Global Advisors in Boston.

(Additional reporting by Rodrigo Campos; editing by Jeffrey Benkoe)