Strong earnings send stocks higher

Stocks moved higher Tuesday as strong earnings and a drop in oil prices offset the impact of lower-than-expected manufacturing activity and apprehension about the Federal Reserve’s impending decision on rates.

Wall Street expects the Fed’s Open Market Committee to raise short-term interest rates by another 0.25 percentage point at the conclusion of its two-day meeting today. The statement that accompanies the decision will also be closely examined for clues about what lies ahead. Worry about the Fed meeting kept some investors on the sidelines, but trading was still brisk — a fact analysts found encouraging after January’s steep declines.

“I think what we’ve got here is a market that looks like it’s on the mend,” said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels in Minneapolis. “To me, you can only say the surprises in the economy and in earnings have been positive this year. Of course, there are some participants who won’t do anything until they see what the Fed is going to do.”

The Dow Jones industrial average closed up 62.00, or 0.59 percent, at 10,551.94.

The broader gauges were also higher. The Standard & Poor’s 500 index rose 8.14, or 0.69 percent, to 1,189.41. The Nasdaq composite index added 6.29, or 0.31 percent, to 2,068.70.

Economists were somewhat disappointed by the Institute for Supply Management’s report on manufacturing. The private research group’s index of manufacturing activity affirmed the rebound at the nations’ factories, but not at the pace economists expected. The reading came in at 56.4, down from a revised 57.3 in December.

Oil prices, which have stayed uncomfortably high despite the relative success of weekend elections in Iraq and OPEC’s decision to maintain its current production targets, declined slightly amid concerns that the oil cartel might cut output soon. Crude futures settled down $1.08 at $47.12 on the New York Mercantile Exchange.

Advancers outnumbered decliners by about 2 to 1 on the New York Stock Exchange. Preliminary consolidated volume came to 2.17 billion shares, compared with 2.01 billion traded Monday.

The Russell 2000 index, which tracks smaller company stocks, was up 4.12, or 0.66 percent, at 628.14.

Overseas, Japan’s Nikkei stock average shed 0.03 percent. In Europe, France’s CAC-40 rose 0.65 percent for the session, Britain’s FTSE 100 added 1.11 percent and Germany’s DAX index was up 0.59 percent in late trading.