Stocks rise modestly as Fed begins meeting

Associated Press + More

NEW YORK (AP) — Stocks rose in early trading on Wall Street Tuesday after several big companies turned in solid earnings. An increase in U.S. home prices sent home builder stocks higher.

The Dow Jones industrial average rose 46 points, or 0.3 percent, to 15,568 in the first hour of trading.

The Standard & Poor's 500 index was up five points, or 0.3 percent, to 1,690. Seven of the index's 10 industry sectors rose, led by utilities and technology companies.

The Nasdaq composite rose 18 points, or 0.5 percent, to 3,617.

Goodyear Tire & Rubber jumped 12 percent to $19.06, the biggest gain in the S&P 500, after reporting that its second-quarter earnings more than doubled. Sales in Latin America rose sharply.

Investors were also keeping a close eye on the Federal Reserve. The central bank began a two-day policy meeting Tuesday.

The Federal Reserve has been buying $85 billion in bonds every month to keep interest rates low and encourage borrowing and hiring. The Fed has said it might start to pull back on the stimulus later this year if the economy continues to improve, but the timing remains uncertain.

The Fed has also kept its benchmark short-term interest rate close to zero and has said it would stay there until the unemployment rate dips below 6.5 percent. The rate currently stands at 7.6 percent.

Shares of homebuilders rose after a report showing that U.S. home prices jumped 12.2 percent in May compared with a year ago, the biggest yearly gain since March 2006.

KB Home rose 21 cents, or 1.2 percent, to $17.09 and PulteGroup rose 16 cents, or 1 percent, to $16.55.

The Standard & Poor's/Case-Shiller 20-city home price index surged 2.4 percent in May from April, nearly matching the previous monthly gain of 2.6 percent — the highest on record.

Crude oil fell $1 to $103.56 a barrel in New York. The price of gold fell $5.90 to $1,322.50 an ounce. The dollar rose against the euro and the Japanese yen.

The yield on the benchmark 10-year Treasury note edged down to 2.58 percent from 2.60 percent the day before.

Among other stocks making big moves:

— Time Warner Cable fell $1.59, or 1.3 percent, to $113.70. The giant cable company is enmeshed in a nasty fee dispute with CBS over programming fees and threatening to pull the broadcaster off its systems.

— Pfizer rose 42 cents, or 1.5 percent, to $29.97 after the pharmaceutical company reported that its income more than quadrupled, helped by the sale of its animal health business.

— Masco jumped $1.33, or 6.7 percent. The home furnishings company posted earnings that beat the forecasts of financial analysts as the company benefited from a surge in home construction.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.