NEW YORK ( TheStreet) -- Major U.S. stock markets pared gains Monday afternoon following a news report that the Federal Reserve is likely to address tapering of its monetary stimulus at its two-day meeting that ends Wednesday. The S&P 500 gained 0.76% to 1,639.04, trading as high as 1,646.50 following better-than-expected manufacturing and housing reports which offered signs that the U.S. economic recovery is strengthening. The Dow Jones Industrial Average added 0.73% to 15,179.85 while the Nasdaq tacked on 0.83% to 3,452.13. The Financial Times reported during the afternoon session that Chairman Ben Bernanke during his press conference on Wednesday is likely to signal that the central bank is close to tapering its purchases of mortgage-backed securities and longer-term Treasuries. The Fed's two-day meeting kicks off Tuesday, with its policy announcement, economic projections, and Fed Chairman Ben Bernanke's press conference taking place on Wednesday. "Every investor right now is thinking about what the Fed is going to say, what the Fed is going to do, and the last time they spoke they roiled the market a little bit," said Randy Warren, chief financial officer at Warren Financial Service. "Stocks were up this morning that Bernanke would come out and sooth the markets, say, 'You know what, we're not going to tapper off the bond buying program,'" said Gene Goldman, director of research at Cetera Financial. "There was excitement about that news, and then around 2 p.m. ET a report came out that said that he's still going to stick to his guns and he's actually going to talk about .... reducing the buyback." New York manufacturing conditions modestly improved this month, the New York Federal Reserve said Monday citing its June Empire State manufacturing survey. The index rose nine points to 7.8, beating economists expectations. Most other indicators in the survey fell as the index for number of employees dropped to zero and the average workweek index retreated ten points to minus 11.3. "In our view it would be risky to deliver a hawkish monetary policy message at a time when growth remains sluggish, inflation continues to trend down and market inflation expectations are dropping sharply," Jan Hatzius, Goldman Sachs' chief economist in New York, commented in a report.