U.S. Stocks Come Off Session Highs

Updated from 9:08 a.m. EDT

Stocks in New York Tuesday enjoyed an upside open Tuesday, as traders geared up for a Federal Reserve meeting and took in solid earnings from energy firm BP ( BP).

The Dow Jones Industrial Average gained 224 points to 8400, and the S&P 500 added 22 to 871. The Nasdaq jumped 48 points to 1554.

During a volatile trading session Monday, the three major averages sold off in the last hour, as pessimism about the fate of the global economy took hold of investors.

As Tuesday began, the Fed was set to begin deliberations on its interest-rate policy. Many investors expect the Federal Open Market Committee to reduce its target interest rate 50 basis points to 1%. Such a move would signal interest in providing the markets with capital to alleviate the ongoing credit crisis.

Meanwhile, the Treasury Department is facing difficulties implementing its $700 billion program to purchase troubled assets from banks, according to a report in The Wall Street Journal. The report indicated that the plan faces delays in hiring managers for the assets.

As for earnings, BP, Europe's second-largest oil company, reported third-quarter earnings that increased 83% on high oil and natural gas prices. Occidental Petroleum ( OXY), another oil-patch denizen, also reported a rise in earnings.

German software firm SAP ( SAP) said its third-quarter profit slipped 5% and said it would not issue a revenue forecast for the remainder of this year.

U.S. Steel ( X) also announced an encouraging third quarter, saying profit more than tripled. However, the company offered softer guidance for the fourth quarter.

Whirlpool ( WHR) reported a 7% decline in third-quarter earnings and said it plans to slash 5,000 jobs.

In other company news, aircraft maker Boeing ( BA) came to a tentative agreement with the International Association of Machinists and Aerospace Workers union. The union had been on strike since Sept. 6.

As for automakers, the Journal reported that General Motors ( GM) may secure a $5 billion government loan -- part of $25 billion in funding recently authorized by Congress -- to finance a purchase of fellow troubled automaker Chrysler.

Elsewhere on the merger front, Huntsman ( HUN) and Hexion Specialty Chemicals faced a setback in their planned deal. The companies announced that they were willing to complete a merger, but have received notice from counsel to affiliates of Credit Suisse ( CS) and Deutsche Bank ( DB). The banks said they do not want to fund the deal today.

Shifting to economic data, traders will get a look at the Conference Board's consumer-confidence reading for October.

As for commodities, crude oil was gaining $1.25 to $64.47 a barrel. Gold was declining $4.20 to $738.70 an ounce.

Longer-dated U.S. Treasury securities were declining in price. The 10-year was down 26/32 to yield 3.79%, and the 30-year was losing 1-26/32, yielding 4.15%. The Treasury has announced a sale of $34 billion in two-year Treasury bills to raise money to continue to bolster the banking system. It plans to raise another $24 billion on Oct. 30.

The dollar was rallying vs. the yen, but falling against the euro and pound.

Overseas, European exchanges, including London's FTSE and Frankfurt's DAX, were mostly trading higher. Asian stocks had a mixed session, as the Nikkei in Japan and the Hang Seng in Hong Kong closed with gains.

( Photo gallery: Trading Faces)