Updated from 4:15 p.m. EDT
Stocks spent much of Tuesday's session just below the flatline, but a rally in the last hour pushed the major indices into positive territory by the close.
Dow Jones Industrial Average
gained 17.93 points, or 0.16%, to 11,369.94, and the
added 2.50 points, or 0.19%, to 1304.28. The
rose by 11.60 points, or 0.54%, to 2172.30.
Sellers appeared to have the upper hand after a steeper-than-expected decline in consumer confidence and word that the
hasn't ruled out additional rate hikes, but enough buyers emerged late to ultimately end the day in the green.
The Nasdaq was supported by gains of 4.5% or more in
Volume picked up slightly, with about 1.38 billion shares changing hands on the
New York Stock Exchange
. Around 1.61 billion shares traded on the Nasdaq. Advancers outpaced decliners 2 to 1.
Wall Street gained more insight into the Fed's strategy when the minutes of the Aug. 8 meeting were posted. At that gathering, policymakers left the fed funds target rate, the rate banks use to charge each other interest for overnight loans, at 5.25%. The Fed had increased rates 17 straight times before pausing.
However, the decision was "a close call," and participants at the meeting felt that more hikes could be needed in the future. The minutes indicated that members of the Federal Open Market Committee believed that "inflation pressures seem likely to moderate over time, reflecting contained inflation expectations and the cumulative effects of monetary policy actions and other factors restraining aggregate demand."
"With this week's backdrop of low volume, this news is operating in a vacuum," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "The minutes showed a Fed that remains data-dependant and diligent against inflation. But clearly, with oil down the last couple of days, it seems that the market is taking everything in stride."
To view Gregg Greenberg's video take on today's market, click here
Richmond Fed President Jeffrey Lacker, who wanted another boost, "believed that further tightening was needed to bring inflation down more rapidly than would be the case if the policy rate were kept unchanged."
Treasuries reversed early declines following the release of the Fed minutes. The benchmark 10-year note rose 2/32 in price, yielding 4.79%. The dollar weakened against most major world currencies.
Earlier, offering the latest clues about consumer attitudes was the Conference Board's monthly consumer confidence index, which came in at 99.6, down from 107 in July. Economists expected a reading of 102.5 because of the cooling housing market and persistently high energy prices. The index now sits at its worst level in nine months.
"The most likely explanation
for the decline is the surge in gas prices in July," said Ian Shepherdson, chief economist with High Frequency Economics. "We also wonder if the increasing talk of a serious crunch in the housing market is also having some effect. The slowing in payroll growth might be hurting, too."
Numerous other reports that investors can use to gauge the strength of the economy are also due this week. Among others, data on second-quarter gross domestic product, nonfarm payrolls for August and the Institute for Supply Management's manufacturing index are expected.
Crude prices were weaker as Tropical Storm Ernesto continued churning on its path toward Florida. The National Hurricane Center said the storm was about 200 miles southeast of Florida and was expected to strengthen before making landfall. Oil for October delivery eased by 90 cents to close at $69.71 a barrel.
Meanwhile, natural gas rebounded to rise 34 cents, finishing at $6.81 per million British thermal units.
Peter Cardillo, chief market strategist with S.W. Bach & Co, recognized that "a drop in oil should be a big positive for the market, but we're not paying attention to that now as we have a slew of economic reports to focus on this week."
was one of the Dow's biggest losers, falling 1%. By sector, the Amex Oil Index was off 0.9%, and the Philadelphia Oil Service Sector Index ended up 1.1%.
As can happen in the late days of summer, corporate news was on the slow side. The U.S. government is probing
to determine whether the company manipulated U.S. crude and unleaded gasoline markets, according to a report in
The Wall Street Journal
. BP lost $1, or 1.5%, to $67.30.
Elsewhere, Dow component
said its board has approved a new share-repurchase plan covering up to $3 billion of stock. Shares were lower by 94 cents, or 1.3%, to close at $73.78.
faced pressure after news that
will launch its own application to create PDF files. Shares of Adobe finished down $1 to $31.86.
Banc of America believes that chip shares can be bought, saying that the average stock in the group is trading at 14 times cash-adjusted 2007 earnings, excluding items. The firm's top picks remain
Overseas, equities were mostly higher. London's FTSE 100 rose 0.2% to 5888, but Frankfurt's Xetra DAX dipped 0.1% to 5848. Tokyo's Nikkei added 0.8% to 15,891, and Hong Kong's Hang Seng rose nearly 1% to 17,083.