NEW YORK — Stocks rose Tuesday as Wall Street, heartened by upbeat earnings, awaited the Federal Reserve’s meeting on interest rates.
The focus will be the central bank when it issues its decision on rates and accompanying economic statement at 2:15 p.m. EDT (1815 GMT). The slumping housing market, tightening credit market and volatile stocks have given investors reason to believe that monetary policy is in need of some loosening.
Most on Wall Street expect either a quarter-point cut in the benchmark federal funds rate or a half-point cut, given last month’s decline in jobs and weakening retail sales. Equally important is how the Fed characterizes the housing, credit and stock markets’ drag on the U.S. economy, and if it suggests there are more rate reductions to come.
As investors waited for the central bank’s decision, they were pleased to see economic and corporate data come in better than expected.
Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, posted a 3 percent decline in third-quarter profit compared to the year-ago period as it struggled with the subprime-mortgage crisis. However, the results beat Street estimates. Lehman is the first of the major U.S. brokerages to report earnings from the most recent, tumultuous quarter.
The Dow Jones industrial average rose 64.71, or 0.48 percent, to 13,468.13.
The broader stock indexes also advanced. Standard & Poor’s 500 index rose 6.43, or 0.44 percent, to 1,483.08, while the Nasdaq composite index gained 6.18, or 0.24 percent, to 2,587.84.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.49 percent from 4.47 percent late Monday. Lehman rose 50 cents to $59.12 after releasing higher-than-expected earnings.