Stocks Rise after Fed Minutes

Investors also weighed reports on factory orders, service-sector sentiment, and pending home sales. Alcoa announced production and job cuts

U.S. stocks moved higher Tuesday, led by gains in technology, broadcasting and diversified chemicals companies. Traders eyed the release of the minutes of the Federal Reserve's Dec. 16 policy meeting, which painted a bleak picture of the economy and supported investor expectations for a government stimulus package. The minutes showed that the Fed intended to buy $600 billion in debt of government-sponsored enterprises, and mortgage-backed securities, by the end of the second quarter. Policymakers also discussed quantitative reserve targets.

Investors also weighed reports that showed November factory orders falling 4.6%, more than expected, after a 6.0% skid in October; a bump higher in the January ISM nonmanufacturing index to 40.6 from 37.3 in December; and a 4.0% decline in the pending home sales index in November.

The dollar index was solidly higher. Bonds were lower. Crude oil futures ended mixed. Gold futures turned higher.

On Tuesday, the 30-stock Dow Jones industrial average rose 62.21 points, or 0.69%, to 9,015.10. The broader S&P 500 index gained 7.25 points, or 0.78%, to 934.70. The tech-heavy Nasdaq composite index added 24.35 points, or 1.50%, to 1,652.38.

Traders were apparently positioning in a wide range of issues for 2009, says S&P MarketScope, as 25 stocks were higher in price for every 7 that declined on the New York Stock Exchange, while the ratio on the Nasdaq was 20-8 positive.

After the market close Tuesday, Alcoa (AA) announced it will reduce aluminum production and cut about 13,500 jobs, or 13% of its global work force, to save cash and reduce costs in the current economic downturn. The company says it will also eliminate an additional 1,700 contractor positions, and has instituted a global salary and hiring freeze.

Dow Chemical (DOW) said it will pursue legal and other options to fulfill rights under its agreement with Petrochemical Industries Co of Kuwait. Last month, Kuwait decided to scrap a deal to form a $17.4 billion petrochemical joint venture with Dow, potentially upsetting the largest U.S. chemical company's plans to buy rival Rohm & Haas. Dow had planned to use proceeds from the joint venture with Kuwait's state-run Petrochemical Industries to repay a large part of the debt financing for the $15.3 billion Rohm & Haas (ROH) acquisition. Dow said other parties had expressed interest about becoming involved in the basic plastics joint venture it was to form with the Kuwaiti company.

President-elect Barack Obama denounced "earmarks" as part of the economic recovery package that is being prepped by the incoming administration, while acknowledging that the budget deficit will top $1 trillion, which could be the rule for years until spending is brought back under control. He emphasized making tough budget choices after meeting with his economic team for the second straight day.

News services report U.S. prosecutors asked a judge to jail accused swindler Bernard Madoff, saying he sent jewelry and other items worth more than $1 million to family and friends in violation of his bail. A lawyer for investment adviser Madoff, who made his first court appearance since his Dec. 11 arrest on a charge of securities fraud in what could be Wall Street's biggest scam, said his client had already returned some of the items and argued that the 70-year-old was not a flight risk. The U.S. magistrate judge reserved decision and asked both sides for more information concerning the purported $50 billion scheme by Thursday.