NEW YORK (AFP) - US stocks rose solidly on Tuesday behind higher oil prices and speculation the Federal Reserve will conclude a meeting the next day with a dovish statement on future interest rate increases.
The Dow Jones Industrial Average rose 282.01 points (1.78 per cent) to 16,167.23.
The broad-based S&P 500 gained 26.55 (1.41 per cent) at 1,903.63, while the tech-rich Nasdaq Composite Index advanced 49.18 (1.09 per cent) to 4,567.67.
The gains came as US oil prices rose 3.7 per cent to US$31.45 a barrel. Analysts said strong earnings by 3M and other Dow members also lifted sentiment.
Market watchers also expect the Fed to signal Wednesday, after a two-day meeting, a go-slow approach to future rate hikes after lifting benchmark interest rates in December for the first time in more than nine years.
"There's some optimism ahead of the Fed tomorrow that we're going to hear some more dovish commentary and that future rate hikes will be data-dependent," said Michael James, managing director of equity trading at Wedbush Securities.
Petroleum-linked shares rose with oil prices. Dow members ExxonMobil and Chevron rose a respective 3.6 per cent and 4 per cent, while oil-services company Schlumberger advanced 3.2 per cent.
Other commodity-linked names gained, including copper miner Freeport McMoRan, which jumped 6.6 per cent, and aluminum producer Alcoa, which rose 5 per cent.
Banks were also strong, with JPMorgan Chase, Citigroup and Bank of America all adding around 2.5 per cent.
Dow component 3M leaped 5.2 per cent after reporting fourth-quarter earnings of US$1.66 per share, three cents above expectations.
Johnson & Johnson jumped 4.9 per cent after reporting fourth-quarter net income came in at US$1.44 per share, two cents above expectations.
Among other Dow members, Procter & Gamble rose 2.6 per cent following its earnings report, while DuPont climbed 0.6 per cent.
Insurer AIG rose 1 per cent as it announced plans to float nearly 20 per cent of United Guaranty Corporation and a number of other streamlining moves, along with US$25 billion (S$35 billion) in capital returns to shareholders. The moves follow pressure from activist investors Carl Icahn and John Paulson.
FirstMerit soared 18.4 per cent on news it will be acquired by Huntington Bancshares for US$3.4 billion in a deal that unites two banks in the midwestern state of Ohio. Huntington Bancshares fell 8.5 per cent.