NEW YORK: US stocks rose sharply Tuesday amid a batch of solid company earnings reports and as investors awaited the outcome of a two-day Federal Reserve meeting.
The Dow Jones Industrial Average leaped 115.49 points (0.93 percent) to finish at 12,595.37.
The tech-rich Nasdaq Composite gained 21.66 points (0.77 percent) at 2,847.54 and the S&P 500, a broad measure of the markets, added 11.99 points (0.90 percent) at 1,347.24.
The Dow index of 30 blue-chip stocks and the S&P 500 closed at their highest levels since June 2008.
The Nasdaq closed a few points shy of its 2007 peak. Beyond that peak are levels last seen in 2001 as the dot.com bubble burst.
‘A bevy of better-than-expected earnings has brought buyers back into the fold after a lackluster session yesterday,’ Briefing.com analysts said in a client note.
Strong earnings from Ford, Dow member 3M and United Parcel Services (UPS) fueled market bulls.
Ford, the second-largest US automaker, posted its highest first-quarter profit in 13 years: $2.55 billion.
Income surged 22 percent from a year ago on the back of sales of fuel-efficient vehicles as it coped with higher commodity prices. Ford shares gained 0.8 percent at $15.66.
Shares in manufacturing conglomerate 3M rose 1.9 percent to $95.94 after posting record sales in the first quarter, with strong growth in Asia despite the impact of the Japanese earthquake and tsunami.
UPS, up 0.9 percent at $74.30, reported a 66 percent jump in first quarter profit and raised its forecast for 2011.
Among the decliners, Coca-Cola fell 1.2 percent to $66.93 after reporting a profit that missed market expectations.
Traders awaited Wednesday's conclusion of a two-day meeting of the Federal Reserve's top policy panel.
The Federal Open Market Committee (FOMC) is weighing whether the economic recovery can sustain itself with less central bank stimulus.
It is widely expected to announce after the meeting that it will maintain ultra-low interest rates to support the recovery and a $600 billion second round of bond purchases, or quantitative easing, will end as planned in June.
Markets also were on tenterhooks for Fed chairman Ben Bernanke's first post-FOMC press conference, the first for any Fed chairman.
‘We hope that someone asks Dr. Bernanke the Fed's estimate of how much of the QE2 funds provided through the massive Fed purchases of Treasury securities have made their way into speculative trading in commodities and other financial instruments,’ said Frederic Dickson at DA Davidson.
‘We doubt that he will provide definitive answers to these questions tomorrow, instead reiterating that the Fed will continue to monitor future economic developments then adjust its policy.’
The bond market gained. The yield on the 10-year Treasury fell to 3.32 percent from 3.36 percent late Monday. The 30-year Treasury slipped to 4.40 percent from 4.46 percent.
Bond yields and prices move in opposite directions.
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