NEW YORK (TheStreet) -- Stocks finished modestly higher Tuesday after minutes from the Federal Reserve's last policy-setting meeting suggested another round of quantitative easing might arrive sooner rather than later.
The Dow Jones Industrial Average rose by 10 points, or 0.1%, to 11,020. The blue-chip index's high for the session was 11,053. The S&P 500 advanced 4 points, or 0.4%, to 1,169, while the Nasdaq closed up 16 points, or 0.6%, at 2,417.
Meanwhile, the dollar traded lower against a basket of currencies following the release of the minutes, with the dollar index down by 0.2%. The benchmark 10-year Treasury note weakened 10/32, raising the yield to 2.429%.
A new program to pump up the economy through the purchase of government debt was the focus of the debate in the closed-door meeting. However, officials did not settle on how big any stimulus program would be or how it would be structured. There were also disagreements among the members of the Federal Open Market Committee related to the timing of the move. Discussions of possible policies
centered on longer-term securities.
|Federal Reserve Chairman Ben Bernanke
Brian Lazorishak, portfolio manager at Chase Investment Counsel, said he was surprised by the amount of back and forth between the officials, as they debated on whether or not to wait for the economy to worsen materially before they act.
"Given the level of dissent, the question is whether there will be a willingness to do enough quantitative easing to make a long-lasting impact on the economy," he said. "Quantitative easing will probably have an asset impact, may cause asset inflation, but I am skeptical about whether it will have a meaningful impact on the economy."
Technology stocks led gains in the broad market, with the PowerShares QQQ (QQQQ)
rising 0.6%. Financials, healthcare and consumer staple stocks made strong recoveries from earlier lows.
Within the Dow, Bank of America (BAC)
, JPMorgan Chase (JPM)
and Alcoa (AA)
were the day's best performers while Verizon (VZ)
, Wal-Mart (WMT)
and Caterpillar (CAT)
were the biggest laggards.
rose 1% to $19.93 in extended trading after its third-quarter profit of 52 cents a share topped Wall Street's consensus view by 2 cents. The chip giant also edged the average analyst view on the topline, posting revenue of $11.1 billion vs. the $11 billion estimate.
Shares of Verizon (VZ)
shed 1.5% to $32.54 on a downgrade to sell from Bernstein Research. The analyst cited concerns about dividend growth.
is acquiring King Pharmaceuticals (KG)
for $3.6 billion in cash, sending King's stock up 39.3% to $14.14. Shares of Pfizer, meanwhile, were up by 0.5% to $17.47.
Activist investor Carl Icahn
bought nearly a 10% stake in Houston-based Dynegy (DYN)
. The move could signal a buyout battle over the company with private-equity player Blackstone. Dynegy's stock surged 2.5% to $4.87.
said it's cooperating with the U.S. Department of Justice in a civil investigation of competitive issues regarding certain practices and policies of its utility companies. The stock shed 0.4% to $76.81.
Shares of Google
rose 0.4% to $541.39. The company signed an agreement to invest in the development of a backbone transmission project off the Mid-Atlantic coast to accelerate offshore wind development.
hit a 52-week high on news that Wal-Mart (WMT)
would begin to sell iPad at its stores. The stock finished higher by 1% at $298.54.
Buyout firm KKR (KKR)
partnered with the Korean national pension system to buy a minority stake in Colonial Pipeline
from Chevron (CVX)
. The deal is valued at close to $1 billion. Chevron's stock was slightly higher at $83.84.
Shares of Office Max (OMX)
jumped 9.7% to $15.69 after a Citigroup report said the stock was undervalued and could be ripe for a takeover.
Coffee sellers Starbucks (SBUX)
and Green Mountain Coffee Roasters (GMCR)
jumped 4.4% to $27.14 and 7.2% to $28.81 respectively on speculation that Nestle was looking to acquire a specialty coffee maker.
In commodity markets, crude oil for November delivery shed 54 cents to settle at $81.67 a barrel, and the December gold contract settled $7 lower at $1,345.70 an ounce.
Overseas Tuesday, Hong Kong's Hang Seng fell 0.4%, and Japan's Nikkei fell 2.1% after China reportedly increased reserve requirements for six banks to damp lending and contain inflation. The FTSE in London fell 0.2%, and the DAX in Frankfurt lost 0.08%.
--Written by Melinda Peer and Shanthi Venkataraman in New York