US stocks pushed to the highest levels in nearly three weeks as investors await news on whether the Federal Reserve will pull back on its stimulus measures.
Small-company stocks were among the best performers in Tuesday's rally, with the Russell 2000 Index pushing to a new record high. The small-cap index jumped 12.08 points, or 1.2 per cent to 999.92, topping the prior record reached May 21.
The Dow Jones Industrial Average added 138.38 points, or 0.9 per cent, to 15,318.23 Tuesday. That extends gains in the blue-chip index to 1.6 per cent so far this week.
The Standard & Poor's 500-stock index rose 12.77 points, or 0.8 per cent, to 1651.81, while the Nasdaq Composite Index climbed 30.05 points, or 0.9 per cent, to 3482.18.
"Investors are obviously anticipating the status quo [Wednesday], with no talk of immediate tapering," said Peter Jankovskis, co-chief investment officer at OakBrook Investments, which oversees about $US3.5 billion.
"More economically sensitive companies had a good day, and that is indicative of what people expect," he said.
Investors are awaiting word from the Fed Wednesday on whether it will begin stepping back from its $US85-billion-a-month bond-buying program, a measure that has kept interest rates low in an effort to bolster growth. In recent weeks, investors had worried that growth may stall without central-bank support, and interest rates on Treasurys have soared amid concern about Fed money leaving that market.
In economic news, the consumer-price index for May rose 0.1 per cent on the month, lower than expected, and 0.2 per cent when excluding the food and energy components, which was in line with analyst predictions.
May housing starts rose less than expected. The number of new building permits, an indication of future construction, fell in May to a level that was slightly above estimates.
"The number was somewhat lower than expected, but the bottom line is that it was a decent report that supports a positive trend," said Richard Sichel, chief investment officer at Philadelphia Trust Co, which manages $US1.9 billion in assets.
But most of the attention this week will be on the Fed's policy-setting committee's statement and chairman Ben Bernanke's news conference on Wednesday.
In Europe, markets were mixed as investors also waited on remarks from Mr Bernanke. The Stoxx Europe 600 dropped 0.1 per cent, and Germany's DAX index added 0.2 per cent. Separately, European Central Bank President Mario Draghi said he wouldn't hesitate to use interest rates and nonstandard measures to bolster the euro-zone economy.
In Asia, Japan's Nikkei Stock Average slipped 0.2 per cent, pulling back from a 4.7 per cent rally over the past two sessions. China's Shanghai Composite Index gained 0.1 per cent, and Australia's S&P ASX 200 eased 0.2 per cent.
Crude oil added 0.7 per cent to $US98.44 a barrel, while gold settled 1.1 per cent lower at $US1366.60 a troy ounce. The US dollar gained ground against the yen but fell against the euro. Demand for the 10-year Treasury note fell, with the yield rising to 2.182 per cent.
In corporate news, Sony rose 68 cents, or 3.3 per cent, to $US21.40 after Daniel Loeb's hedge fund, Third Point, increased its stake in the company to nearly 7 per cent and urged Sony to launch an initial public offering of its entertainment division. Sony said Tuesday that it would review Mr Loeb's proposal, while repeating previous statements that its movie and music business unit isn't for sale.
Hormel Foods dropped 1.46, or 3.6 per cent, to 39.19 after the company lowered its fiscal 2013 earnings forecast, blaming higher input costs, softer sales of refrigerated retail products and lower-than-expected results from its pork operations.
Jack in the Box increased 1.82, or 4.9 per cent, to 38.81 after the fast-food operator said it plans to close 67 company-operated Qdoba Mexican Grill restaurants by the end of the fiscal year as the restaurant operator looks to focus on its core markets. Competing burrito-chain operator Chipotle Mexican Grill also rose 4.98, or 1.4 per cent, to 372.66.
Sprint Nextel rose 10 cents, or 1.4 per cent, to 7.32 amid news the company has filed a lawsuit against Dish Network and Clearwire in an effort to block the satellite-TV provider's tender offer for Clearwire. Dish Network gained 26 cents, or 0.7 per cent, to 39.09, while Clearwire slipped seven cents, or 1.5 per cent, to 4.56.
Valeant Pharmaceuticals International rose 1.04, or 1.2 per cent, to 85.86 after the firm said it aims to raise $US1.75 billion in a sale of its common shares to help fund its planned $US8.7 billion acquisition of global eye-care company Bausch & Lomb Holdings.
