NEW YORK, Sept. 17 (Xinhua) -- U.S. stocks closed higher on Tuesday, with the Dow Jones Industrial Average and the Standard & Poor's 500-stock index edging closer to all-time highs, as the U.S. Federal Reserve kicked off a two-day monetary policy meeting.
The blue-chip Dow jumped 34.95 points, or 0.23 percent, to 15, 529.73 points. The broader S&P 500 gained 7.16 points, or 0.42 percent, to 1,704.76 points. The tech-rich Nasdaq Composite Index was up 27.85 points, or 0.75 percent, to 3,745.70 points.
The market rally brought both the Dow and the S&P 500 near their all-time closing highs set in early August. The two indices were less than 1 percent shy of their peaks.
Economists expected the U.S. central bank to announce for the first time a small tapering of its monetary stimulus at the meeting. Fed Chairman Ben Bernanke will hold a press conference after the meeting on Wednesday afternoon.
It is probable for the Fed to announce 15 billion to 18 billion U.S. dollars taper at the meeting, Kenneth Polcari, director of New York Stock Exchange Floor Operations at O'Neil Securities, told Xinhua Monday.
Mark Newton, chief technical analyst at Greywolf Execution Partners Inc., also told Xinhua Monday that it would be bullish for the market if the Fed cut 10 billion to 15 billion dollars of bond buying.
The Fed now purchases 85 billion U.S. dollars a month in Treasury bonds and mortgage-backed securities.
On the economic front, U.S. Consumer Price Index edged up 0.1 percent in August on a seasonally adjusted basis, the Labor Department said Tuesday. Excluding the volatile food and energy categories, the so-called "core" inflation index also rose 0.1 percent last month, indicating that inflationary pressure was largely absent.
"Even with consumer prices in check, however, the year-over- year increase in rents was the highest since the spring of 2009 and will support the case for tapering," said Jay Morelock, an economist at FTN Financial, in a note Tuesday.
Moreover, following four consecutive months of improvement, U.S. builder confidence in the market for newly built, single-family homes remained unchanged in September, with a reading of 58 on the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday.
In corporate news, Microsoft shares rose 0.39 percent to 32.93 dollars as the giant software maker sharply raised its quarterly dividend.
In other markets, the U.S. dollar continued its downward trend against major currencies Tuesday as investors were reluctant to bet before the Fed meeting concludes.
In late New York trading, the euro climbed to 1.3357 dollars from 1.3333 dollars of the previous session, and the British pound increased to 1.5910 dollars from 1.5898 dollars. The greenback bought 99.13 Japanese yen, lower than 99.17 yen of the previous session.
Oil prices continued to fall amid a waning risk of an imminent military strike against Syria.
Light, sweet crude for October delivery moved down 1.17 dollars to settle at 105.42 dollars a barrel on the New York Mercantile Exchange. Brent crude for November delivery declined 1.88 dollars to close at 108.19 dollars a barrel.
Gold futures on the COMEX division of the New York Mercantile Exchange ended lower Tuesday, the fifth drop in six sessions, as the latest CPI data showed the cost of living in the United States rose less than forecast, crimping the appeal of gold as a safe heaven.