NEW YORK – Traders pushed shares higher Tuesday after minutes from the latest Federal Reserve meeting kept hope alive that the central bank would take more action to stimulate the economy.
The Fed had said after its Sept. 21 meeting that it was concerned that inflation was too low, and suggested it could step up its purchases of government bonds and take other action to encourage lending.
Minutes from the September meeting, released Tuesday afternoon, indicated that Fed Chairman Ben Bernanke and his colleagues were nearing a consensus on what steps to take. Traders are hoping for more concrete news from the Fed following its next meeting in early November.
The dollar fell against other currencies after the Fed minutes came out as traders anticipated another reduction in U.S. interest rates.
Stocks turned higher in the afternoon, led by financial stocks. Technology stocks edged slightly higher, led by Citrix Systems, Inc. and Apple Inc.
The tech-heavy Nasdaq composite index rose 15.59, or .6 percent, to 2,417.92, while the Dow Jones industrial average rose 10.06 points, or .09 percent, to 11,020.40.
Google shares rose by $2.55 to $541.39 after the company said it would invest in wind farms off the East coast. Apple hit a new record, approaching $300 for the first time, after Wal-Mart Stores Inc. said its stores will start carrying the popular iPad.
In other corporate news, shares of King Pharmaceuticals Inc. surged after Pfizer Inc. agreed to buy the drugmaker for $3.6 billion in cash. Traders sold shares of CSX Corp. before the company reports results after the market close.
The Standard & Poor's 500 index rose 4.45, or 0.38 percent, to 1,169.77.
Shares of Intel Corp. rose 1.1 percent in after-hours trading after the chipmaker announced that it beat analysts estimates on earnings per share and total revenue in the third quarter.
CSX Corp., one of the largest railroad companies in the United States, also beat analyst estimates on both earnings and sales. Shares rose 2.4 percent in after-hours trading.
Treasury prices traded in a tight range. The yield on the 10-year Treasury note, which moves opposite to its price, rose slightly to 2.43 percent. Bond markets were closed Monday for the Columbus Day holiday.
Stocks have rallied in recent weeks as traders bet the Fed will enact the bond-buying program as early as its next meeting, which ends Nov. 3. Buying bonds would drive interest rates and yields even lower, which makes stocks a more attractive investment.
Paul Brigandi, senior portfolio manager at Direxion Funds, said a pause in the market is normal because stocks have surged on expectations for Fed actions and upbeat earnings in the coming weeks. The Dow has risen 1.7 percent this month and is up about 10 percent since the beginning of September.
"A lot of the best-case scenarios are priced into the market right now," Brigandi said. Now investors want to pause and see if those scenarios play out, he said.
About four stocks rose for every three that fell on the New York Stock Exchange where consolidated volume came to 4 billion shares.