Updated from 4:18 p.m. EDTHopes that the Federal Reserve will continue to slice interest rates in order to spur economic activity lifted both the Dow Jones Industrial Average and the S&P 500 to record highs Tuesday. The Dow jumped 120.80 points, or 0.86%, to 14,164.53, and the S&P was up 12.57 points, or 0.81%, at 1565.15. The Nasdaq Composite rose 16.54 points, or 0.59%, to 2803.91. Of the Dow's 30 components, only three finished lower. Alcoa ( AA) and American Express ( AXP) were the best performers, adding 3.7% and 3%, respectively. The major averages surged after traders digested the minutes of the Sept. 18 Fed gathering. During that meeting, the Federal Open Market Committee cut its fed funds target rate by 50 basis points -- a bigger move than many expected -- as a measure against the liquidity problems in financial markets stemming from the subprime mess. "Given the unusual nature of the current financial shock, participants regarded the outlook for economic activity as characterized by particularly high uncertainty, with the risks to growth skewed to the downside," the minutes read. "Some participants cited concerns that a weaker economy could lead to a further tightening of financial conditions, which in turn could reinforce the economic slowdown." The panel also noted eased inflation concerns, saying that "the inflation situation seemed to have improved slightly and judged that it was no longer appropriate to indicate that a sustained moderation in inflation pressures had yet to be shown."