NEW YORK – Stocks rose sharply on Wall Street Tuesday as traders turned their focus back to corporate news from the United States, and hopes that the Federal Reserve will come up with a plan to jump-start the economy.
Banks and materials stocks led the market higher.
The Dow Jones industrial average soared 95.51 points to 12,837.33, its highest close in a month. Microsoft was one of the biggest gainers in the Dow.
The stock jumped 3 percent after the company announced a new tablet computer called Surface to compete with the immensely popular iPad from Apple. Microsoft was up 86 cents at $30.70.
The Standard & Poor’s 500 index rose 13.20 points to 1,357.98. The technology-heavy Nasdaq composite index rose 34.43 points to 2,929.76.
Stock traders are also latching on to recent signals from the Federal Reserve that the central bank may reveal plans to stimulate the economy at the end of its two-day meeting today.
“A good portion of today’s strong market action is from a hope factor that we’re going to get more easing from the Fed,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
Economists say that even if the Fed does not act after its meeting, it will send a clear message that it is standing by to do so if needed.
Financial companies were among the best-performing stocks as investors hoped for Fed action: Bank of America soared 4.5 percent, Citigroup gained 3.5 percent, JPMorgan Chase was up 2.2 percent and Morgan Stanley rose 3 percent.