Stocks higher on home building, low inflation

Traders work on the floor of the New

Traders work on the floor of the New York Stock Exchange in Manhattan Monday. The Labor Department is expected Tuesday to report that inflation remains tame. (June 17, 2013) Photo Credit: Getty Images

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It's all about the Fed. Still.

U.S. stocks moved higher Tuesday, helped by news of a pickup in home building and low inflation. But the Federal Reserve loomed large, with investors trying to guess what the central bank will say Wednesday about how long it plans to keep stimulus programs in place. For many, the market was in a holding pattern as investors waited for Wednesday's announcement.

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The market's gains were steady and broad. The Standard & Poor's 500 index rose 0.78 percent to 1,651.81. The Russell 2000, an index of smaller companies, closed at a record high but fell just shy of the 1,000-point milestone.

The Commerce Department reported that the pace of new home building increased in May, helped by more buyers coming to the market and a scarcity of houses for sale. Investors described the report as good enough to send the market up, but not good enough for the Fed to think the economy is healthy enough to abruptly slash its stimulus efforts.

The Labor Department reported that U.S. consumer prices rose last month, but only slightly.

In other trading, the Dow Jones industrial average rose 138.38 points to 15,318.23. The Nasdaq composite index rose 0.87 percent to 3,482.18.

-- AP

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