Stocks rise while investors wait for Fed

Stocks inched higher Tuesday, as investors cautiously awaited the Federal Reserve's decision on interest rates and sifted through another batch of earnings reports that included three Dow Jones industrials.

The central bank's two-day meeting ends Wednesday afternoon. Market watchers are expecting the Fed to keep rates unchanged as they have for the past four meetings after 17 straight hikes, because recent economic data has been showing slow, stable growth.

Now that investors have abandoned their hopes for a rate cut anytime soon, many are regarding this year's positive economic reports and the Fed's holding pattern as auspicious for stocks.

"If the Fed feels the economy is strong enough on its own, it means corporate earnings this year will probably be better than people were expecting," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc. in St. Louis.

Investors also remain focused on financial results for the last quarter, with about half the Standard & Poor's 500 so far issuing reports. Results have so far have been slightly above expectations, though not robust enough to indicate double-digit growth.

Diversified manufacturer 3M Co. fell after it issued disappointing fourth-quarter results. Drugmaker Merck & Co. and Procter & Gamble also were heavily traded after posting results.

In late morning trading, the Dow rose 22.28, or 0.18 percent, to 12,513.06.

Broader stock indicators were also higher. The S&P 500 index was up 2.94, or 0.21 percent, at 1,423.56, and the Nasdaq composite index rose 2.82, or 0.12 percent, to 2,443.91.

The bond market remained mostly unchanged as investors also awaited a decision from the Fed. The yield on the benchmark 10-year Treasury note was unchanged at 4.87 percent from late Monday.

Investors got few hints about the Fed's likely moves from the latest batch of economic data. The Conference Board, a business research group, said consumer confidence rose modestly in January as the job market remained strong.

Oil prices rebounded after a sharp drop Monday. A barrel of light sweet crude rose $1.10 to $55.11 the New York Mercantile Exchange.

The dollar was mixed against other major currencies, while gold prices rose.

Merck fell 42 cents to $45.09 after the drug company posted a 58 percent decline in quarterly profit. The company was hurt by a slew of restructuring charges and increased legal reserves linked to the withdraw of the painkiller Vioxx.

3M, which makes products such as Post-It notes and Scotch tape, jumped 58 percent after taking a large gain on the sale of its pharmaceutical business. However, the company _ often considered a barometer of U.S. business health because of the products it sells _ missed Wall Street expectations after stripping out that gain. Its shares fell $3.58, or 4.5 percent, to $75.38.

Consumer products maker Procter & Gamble said higher sales of Gillette razors and Tide detergent helped fiscal second-quarter profit jump 12 percent.

However, shares fell 68 cents to $64.20. Rival Colgate-Palmolive also dipped 11 cents to $66.60 despite issuing a better-than-expected profit increase.

Motorola gave the technology sector a boost, however, after billionaire investor Carl C. Icahn said he was seeking a seat on the cell phone maker's board of directors.

Motorola rose $1.15, or 6.3 percent, to $19.46.

The Russell 2000 index of smaller companies was up 1.13, or 0.14 percent, at 794.23.

Advancing issues led decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 432.2 million.

Overseas, Japan's Nikkei stock average rose 0.11 percent. In afternoon trading, Britain's FTSE 100 was down 0.02 percent, Germany's DAX index rose 1.01 percent, and France's CAC-40 gained 0.34 percent.

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