Stocks gain as Fed starts monthly meetings

Traders work the floor of the New York

Traders work the floor of the New York Stock Exchange on Monday. (Sept. 16, 2013) Photo Credit: Getty Images

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Stocks rose Tuesday as investors shrugged off worries about what the Federal Reserve is up to.

Many expect the Fed to reduce its $85 billion monthly bond-buying program after a two-day meeting that began Tuesday. Wall Street is hoping for a small reduction, because the bond-buying has had the effect of keeping interest rates ultralow and making it cheaper to borrow money.

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At the close on Wall Street, the Dow Jones industrial average was up 34.95 points at 15,529.73. The Standard & Poor's 500 index rose 0.42 percent to 1,704.76, five points below its Aug. 2 record high. 2. The Nasdaq composite was up 0.75 percent at 3,745.70.

Microsoft rose after announcing a 22 percent dividend increase and a $40 billion stock buyback program. Microsoft was up 13 cents to close at $32.93.

Outerwall, which owns the Redbox DVD kiosks, plunged $6.48 to close down at $49.49 after slashing its outlook because of weaker-than-expected demand for discs.

Also Tuesday, the Labor Department reported that U.S. consumer prices barely rose last month, the latest sign that slow economic growth is keeping inflation tame. -- AP

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