NEW YORK (TheStreet) -- Stocks moved even higher in a slow-burn rally on Tuesday afternoon, shaking off earlier jitters surrounding the beginning of the Federal Reserve's monthly meeting.
The S&P 500 added 0.58%, the Dow Jones Industrial Average gained 0.64%, and the Nasdaq added 0.58%.
The Fed will release a statement Wednesday afternoon and a press conference will follow. Economists do not expect the Fed to raise interest rates until September at the earliest.
"Activity is not yet strong enough to give the Fed 'reasonable confidence' that progress in the labor market will continue," said SG Global Economics' Michala Marcussen. "Therefore, we do not expect any signals regarding the timing of the lift-off in rates."
U.S. housing starts in May fell 11.1% to an annual rate of 1.04 million from a revised 1.17 million in April, which was the highest since November 2007. Permits for future construction were a bright spot, though, jumping 11.8% to a 1.28 million unit rate. That was its highest point since August 2007.
"Housing remains an area of focus for many and rightfully so," said Dan Greenhaus, chief strategist at BTIG Research. "While the May starts data was a bit of a disappointment, the permit data was much stronger than expected suggesting starts should continue to improve in coming months, supporting job creation and the broader economy."
European markets extended Monday's losses ahead of Greece and its European creditors' final round of negotiations on Thursday. Eurozone finance ministers are pushing Greece to introduce a round of austerity measures in exchange for further debt relief.
A compromise is looking unlikely, though, as Greek Finance Minister Yanis Varoufakis told a German newspaper that Athens would not be putting forth any new concessions. Greece has until the end of the month to repay its debts to the International Monetary Fund.
United Continental (UAL) shares were sharply lower after United Airlines announced plans to end service at New York's John F. Kennedy International Airport in October, shuttering hubs that have proven unprofitable over seven years. By October, United will transfer its JFK flights to Newark, a more profitable hub given the number of connecting flights available.
Adobe Systems (ADBE) gained nearly 2% ahead of its second-quarter earnings report to be released after the closing bell. The software developer is expected to earn 45 cents a share, up from 37 cents in the year-ago quarter, on $1.16 billion in revenue, up 8.4% year on year.
Procter & Gamble (PG) was among the best market performers on reports it had sold its Max Factor, Covergirl and Wella brands to Coty (COTY) for as much as $12 billion, according to the New York Post. Procter shares gained 1.4%, while Coty jumped 17.8%.
There were more signs of consolidation in the health care sector as UnitedHealth (UNH) reportedly approached Aetna (AET) about a takeover deal worth more than $40 billion, according to The Wall Street Journal. Health insurance company Cigna (CI) was reportedly approached by Anthem (ANTM) with a bid, according to reports on Monday.
Amazon (AMZN) shares were on watch on reports the company is exploring crowdsourced delivery options. The online retailer is reportedly developing an app that would pay regular people to deliver packages rather than delivery companies such as UPS (UPS).
Gap (GPS) shares added 1.3% on Tuesday after the retailer announced it will shut 175 of its namesake locations in North America over the next few years. The company has faced weakening demand at its North American stores. Gap will also cut 250 corporate jobs at its headquarters. Click here for more.
Avalanche Biotechnologies (AAVL) plummeted 53.7% after announcing the results of top-line results from a Phase 2a study for its leading experimental product AVA-101. The treatment for wet age-related macular degeneration disappointed on one of its assessment criteria.