Dow rises as Wall St turns optimistic

NEW YORK (AP) — Investors are getting optimistic that the Federal Reserve will restart some of its economic stimulus programs.

The Dow rose 45.19, or 0.4 percent, to 10,698.75. The Standard & Poor’s 500 index rose 6.15, or 0.6 percent, to 1,127.79, and the Nasdaq composite index rose 17.22, or 0.8 percent, to 2,305.69.

Stocks closed moderately higher Monday, a sign that many investors expect the Fed to take steps to put some energy back into the recovery. The Dow Jones industrial average rose 45 points.

Trading was very light as many investors stayed out of the market while they waited for the Fed’s decision. Many traders have been avoiding any big investment decisions for much of the summer because they have no sense of where the economy is headed.

The Fed’s assessment of the economy, and any plans to resume its stimulus measures, will be issued after its meeting Tuesday.

“The market loves stimulus. The market wants stimulus,” said Joe Saluzzi, co-head of equity trading at Themis Trading LLC in Chatham, New Jersey.

The Fed will likely leave its federal funds rate near zero, but the central bank could signal plans to restart some programs such as its purchase of mortgage-backed securities or buy Treasury bonds.

The central bank’s programs ended earlier this year when it appeared the recovery was proceeding well.

“The Fed has a lot of tools in its tool shed,” said Larry Rosenthal, president of Financial Planning Services in Manassas, Virginia. “They have to bring buyers back into the market; they have to bring consumption back into the market.”

Still, Rosenthal said any moves would also have to ensure that inflation doesn’t become a problem too quickly. The Fed could say Tuesday that it is ready to start new programs to encourage bank lending even if it doesn’t implement them immediately.

Hewlett-Packard Co. shares managed a small gain after its CEO was forced to resign Friday.

Advancing stocks were ahead of losers by almost 3 to 1 on New York Stock Exchange, where volume came to 789 million shares.