By Kate Gibson
U.S. stocks tallied mild gains Tuesday after Standard &
Poor's affirmed debt-laden Greece's credit rating and as investors
anticipated the Federal Reserve would hint at record low
interest-rates for an extended period.
"We expect the Fed to provide an updated assessment of the
progress on the economic recovery, although we wouldn't be
surprised to see the tone of that assessment a little more subdued
than provided in their late January statement," said Fred Dickson,
chief market strategist at Davidson Cos.
While the Fed is widely expected to keep its target rate for
overnight loans at between zero and 0.25%, the central bank's
accompanying policy statement will be analyzed for clues as to the
timing of future rate-hike moves.
Any differences in the Fed's wording that signals the central
bank would hike rates sooner rather than later could spark selling
of equities, given higher rates translate to increased borrowing
costs and hinder economic growth.
"Nearly everyone expects the Fed to leave the policy rate
unchanged. But the language used when communicating this decision
is pretty important," said Kevin Giddis, head of fixed income at
Morgan Keegan, of the statement slated for release at 2:15 p.m.
Eastern.
Up for a sixth day, the Dow Jones Industrial Average (DJI) rose
8.16 points, or 0.1%, at 10,650.16, with 17 of its 30 components
advancing, led by Intel Corp. (INTC), up 3.5%, after the technology
bellwether released its newest server chips.
Also boosting the Dow, General Electric Co. (GE) shares gained
2.8% after the company's CFO said he expects the conglomerate's
earnings and dividend to climb next year.
On the New York Stock Exchange, advancers led decliners nearly
2-to-1.
A day after finishing at a 17-month high, the S&P 500 Index
(SPX) added 4.27 points, or 0.4%, to 1,154.78, with
natural-resource companies leading the gains and health care the
sole declining sector among the index's 10 industry groups.
The Nasdaq Composite Index (RIXF) climbed 8.79 points, or 0.4%,
to 2,370.96.
The dollar weakened against the euro after S&P opted not to
downgrade Greece, a step the rating agency last month warned was
under consideration.
"Greece is no longer facing the threat of an imminent
downgrade," said analysts at Action Economics.
Ahead of Tuesday's open, the Commerce Department reported
new-home construction fell 5.9% to a seasonally adjusted annual
rate of 575,000. The January count was revised up to a pace of
622,000 units.
In a separate report, the Labor Department said the price of
imports declined 0.3% in February, the first drop in seven
months.
A standout among retailers was Limited Brands Inc. (LTD), shares
of which rose 4.2%. The company declared a special dividend of $1 a
share and said it would repurchase up to $200 million in stock.
The dollar's slide against the euro and other major currencies
boosted commodities including gold and oil, making them less costly
to foreign buyers. and
Shares of natural-resource companies also rose, with Cliffs
Natural Resources Inc. (CLF) up 5.1% and Newmont Mining Corp. (NEM)
gaining 2.7%.