* Eyes turn to Fed meeting and decision on stimulus
* Market gains led by tech, energy stocks
* Netflix, DreamWorks shares jump after deal on programs
* Terex tumbles after outlook, Time Warner falls on
* Indexes up: Dow 0.7 pct, S&P 500 0.6 pct, Nasdaq 0.8 pct
By Ryan Vlastelica
NEW YORK, June 17 U.S. stocks rose on Monday but
ended well off their highs as investors speculated over the
Federal Reserve's intentions about its massive stimulus program
to aid the economy before a meeting of policymakers that begins
Major indexes climbed from the start of the session and were
more than 1 percent higher for much of the day, recovering all
of last week's losses, on the view that the Fed would reaffirm
its policies of supporting the economic recovery at the end of a
two day meeting that starts on Tuesday.
However, the Financial Times reported the Fed was likely to
signal that a move to reduce the program was close.
"We're held hostage in front of comments about what the
direction for stimulus is, and the market is always more
volatile when it is in front of the information flow," said Dan
Veru, who helps oversee $3.8 billion as chief investment officer
at Palisade Capital Management LLC in Fort Lee, New Jersey.
Stocks also were supported by economic data that showed
homebuilders were more confident and business activity in the
New York Fed's district had expanded in June.
The Dow Jones industrial average was up 109.74
points, or 0.73 percent, at 15,179.92. The Standard & Poor's 500
Index was up 12.36 points, or 0.76 percent, at 1,639.09.
The Nasdaq Composite Index was up 28.58 points, or 0.83
percent, at 3,452.13.
Volatility spiked beginning May 22 when Fed Chairman Ben
Bernanke said the Fed could reduce the pace of its stimulus in
the "next few meetings" if the economy showed continued
improvement and inflation remained moderate.
The Dow industrials averaged daily swings near 191 points
A consensus was building among many investors that the U.S.
central bank would scale down its policy of buying $85 billion
of bonds each month, which was credited with fueling a 15
percent rise in the S&P 500 in 2013.
Investors are anxious to find out where the Fed stands on
winding down the stimulus, with some investors and analysts
believing there will be no changes this week.
"Short-term traders may want to see the whites of the Fed's
eyes before they do anything," said Jim McDonald, who helps
oversee about $760 billion as chief investment strategist for
Northern Trust Global Investments in Chicago.
The Federal Open Market Committee will release a statement
on Wednesday, followed shortly after by a news conference by
With the day's gains, the S&P is within 2 percent of its
all-time closing high of May 21.
U.S. homebuilder sentiment jumped in June to a 7-year high,
the highest level since the start of the housing crisis. The
PHLX housing sector index rose 1.6 percent. D.R. Horton
Inc rose 1.5 percent to $24.26 while Toll Brothers
added 2.4 percent to $33.66.
In another economic report, the New York Fed's "Empire
State" general business conditions index showed expansion in
June after a negative reading in the previous month, but the
data also showed measures of new orders and employment this
month fell to five-month lows.
"While this data was better than expected, some investors
are no doubt thinking that it increases the odds that the Fed
will begin slowing down," said Kate Warne, investment strategist
at Edward Jones in St. Louis, which has $670 billion in assets.
About 64 percent of stocks traded on the New York Stock
Exchange closed higher, while 61 percent of Nasdaq-listed shares
ended in positive territory.
Netflix Inc jumped 7.1 percent to $229.23 as the
biggest percentage gainer on the S&P after it signed a
multi-year deal for programming from DreamWorks Animation
. DreamWorks added 4.1 percent to $23.74.
Advanced Micro Devices Inc rose 2.8 percent to $4.05
after Barron's said prospects look better for the maker of
microprocessors for personal computers.
On the downside, Time Warner Cable Inc fell 2.5
percent to $101.29 after Raymond James downgraded the stock to
"market perform" from "outperform." Terex Corp tumbled
7.7 percent to $29.29 after the machinery maker cut its earnings
But trading volume was light as many traders held off adding
to positions before the Fed announcement.
About 5.24 billion shares changed hands on the New York
Stock Exchange, the Nasdaq and NYSE MKT, below the daily average
so far this year of about 6.36 billion shares.