NEW YORK (TheStreet) -- After wavering in and out of positive territory Tuesday, stocks took a firm jump into the green less than an hour into the closing bell and finished on solid footing. Equities popped on a report that China is injecting large-scale stimulus to its top banks.
Stocks broke out of their narrow trading range after a Sina.com report said the People's Bank of China is using its standing lending-facility to boost liquidity in the country's five biggest banks by 500 billion yuan ($81 billion). A spate of recent data suggested the economic growth engine in China was beginning to stall, but China's aggressive reaction to these reports quickly snuffed out worries of dimming prospects.
"China's reaction minimized the concerns about the global impact of a slowing China," said Jim Dunigan, chief investment officer at PNC Wealth Management.
TheStreet's Ruben Ramirez takes a look at what economists are expecting to hear from the Fed Wednesday:
Stocks also got a boost after The Wall Street Journal's Jon Hilsenrath reported that the Federal Reserve may be keeping its "considerable time" wording on near-zero interest rates in Wednesday's policy projections.
That being said, the market is still in its 18-day trading range of 2011/1977, which is "very tight," said S&P Dow Jones Indices' senior index analyst, Howard Silverblatt. Silverblatt said the market will react if there is a perceived speed-up to a rate increase on Wednesday, but most are hoping for only a slight change. "Most are also hoping for the market to basically hold its ground until earnings season -- which is estimated to set a new record," Silverblatt commented.
The Dow Jones Industrial Average
In Tuesday's individual stock news, Alibaba, the e-commerce giant, raised the price range of its initial public offering because of strong demand to $66 to $68 a share, up from its previously set range of $60 to $66 apiece.
UPS (UPS) edged up 0.35% to $97.96. The shipping giant said it expects to hire between 90,000 and 95,000 seasonal employees to support the anticipated holiday surge in package deliveries that will begin in October and continue through January.
Sears (SHLD) has entered into a $400 million secured short-term loan with CEO Edward Lampert's hedge fund to be used for general corporate purposes. The stock tumbled 9.4% to $30.37.
U.S. producer prices for August were flat vs. the 0.1% uptick expected by economists, the Bureau of Labor Statistics reported before the market open.
-- By Andrea Tse in New York