U.S. Stocks Pare Gains

Updated from 9:43 a.m. EDT

Stocks in New York Tuesday were easing off their morning highs following an upside open Tuesday, as traders geared up for a Federal Reserve meeting and took in a series of corporate earnings reports.

The Dow Jones Industrial Average was up 155 points to 8331, and the S&P 500 added 9.2 to 858. The Nasdaq jumped 17 points to 1523.

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.

"Often times you see the market move, and you try to back into reasons the market moves," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research. Sparks said he's inclined to believe that today's rally is a bounce within a downtrend and is not based on cheap valuations or speculation about a Fed rate cut. "Unless the rally sustains itself for a significant period ... I don't see it as being meaningful."

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, the Conference Board's read of October consumer confidence registered at an all-time low of 38, down from 61.4 in September and well below economists' predictions of 52.

In housing, the S&P Case-Shiller 20-city home price index declined 17% year over year in August. The 10-city index dropped 18%. The declines in both indices are the largest on record.

As for commodities, crude oil was gaining 45 cents to $63.67 a barrel. Gold was declining $6.80 to $736.10 an ounce.

Longer-dated U.S. Treasury securities were declining in price. The 10-year was down 16/32 to yield 3.75%, and the 30-year was losing 28/32, yielding 4.09%. 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. its major foreign competitors.

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)