Bulls regain strength Tuesday, though gains were mild ahead of the FOMC statement due out Wednesday. The Dow ($INDU) added 51.01 points to a level of 9,829.87. The S&P 500 ($SPX) gained 7.00 points to 1,071.66. The Nasdaq ($COMPQ) tacked on 8.26 points to 2,146.30. Volume was moderate on the session with the NYSE trading 1.27 billion shares and the Naz turning over 2.51 billion shares. Market breadth was positive on the session by a 22-to-9 and 16-to-12 margin on the Big Board and Naz respectively.

Though mild, Tuesday's gains pushed the major market indices to another new high for 2009. At the same time, the Dow is on track to see its largest ever quarterly advance. The index has gained 1,335 points, a few short of the record set in the fourth quarter of 1998 of 1,339 points. Gains Tuesday came on another decline in the value of the dollar as the currency hit a yearly low against the euro. The fall in the dollar benefits commodity prices and the prospects for the stock market.

Financials and industrial stocks led the rally today with JPMorgan (JPM), Caterpillar (CAT) and Alcoa leading the advance on the Dow. JPM tacked on 4.31 percent to a price of $46.47 with CAT up 3.58 percent and AA rising 2.30 percent. Bank of America (BAC) shares rose 2.09 percent despite news the company could be embroiled in a trial with the SEC in the near future.

Shares of U.S. Steel (X) gained 4.62 percent thanks to gains in metal prices. At the same time, Bank of America raised its rating on the stock to "Neutral" from "Underperform" on the view the company will become profitably next year. Alcoa (AA) benefited from its stock price target being raised at Goldman Sachs.

Not all stocks rose though, with Lowe's (LOW) falling after warning the home-improvement retailer would see charges in the quarters to come. The company did confirm its full year outlook, though this view was lowered earlier in the quarter. LOW shares fell 4.01 percent to $21.07 with a 52-week range between $13.00 and $25.37.

Now the focus is firmly on the FOMC meeting, which began today. The committee will release its statement Wednesday afternoon at 2:15 p.m. est. Traders are listening for a time table from the Fed as to when they will start unwinding their balance sheet expansion.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site