Stocks move higher in early afternoon as Fed meets

New York (AP) — U.S. stocks are moving higher in early afternoon trading Tuesday with energy stocks leading the way. Investors are keeping an eye on a two-day Federal Reserve meeting that got underway.

Keeping score: The Standard & Poor's 500 index climbed 14 points, or 0.7 percent, to 1,998 as of 1:04 p.m. Eastern time. The Dow Jones industrial average rose 105 points, or 0.6 percent, to 17,135. The Nasdaq composite gained 23 points, or 0.5 percent, to 4,542.

Fed watch: The Fed began a two-day meeting on Tuesday morning that many investors expect will bring it closer to raising its key interest rate as the economy strengthens. Fed Chair Janet Yellen will discuss the outlook for employment and inflation, and the bank's rate plans in a press conference on Wednesday. The Fed has held the rate close to zero for more than five years, and stocks have surged against that backdrop.

Inflation watch: A measure of prices that U.S. producers receive for their goods and services was unchanged in August, the latest sign that inflation is in check. A drop in wholesale gas and food prices was offset by higher prices for transportation and shipping services, the Labor Department said Tuesday.

Winners and losers: Energy stocks gained 1.7 percent, the most among the 10 industry sectors in the S&P 500, as oil prices climbed. Exxon Mobile rose 1.7 percent, the biggest gainer in the Dow. The price of U.S. benchmark crude increased $1.85, or 2 percent, to $94.77 in New York.

The Russell 2000, an index of small company stocks, rose 0.3 percent after falling 1.2 percent the day before.

The Quote: "The economy continues to improve in the U.S., and there's still an accommodative Fed," said Brad Sorensen, director of market and sector research at the Schwab Center for Financial Research. "We think the bull market has further to run."

Buyback boost: Humana Inc. rose $4.15 to $131.81, a gain 3 percent. The health insurer said it plans to repurchase as much as $2 billion of its own shares, double what it had previously planned. The stock has climbed 29 percent so far this year.

Scotland's choice: Investors are also awaiting a referendum on Scottish independence on Thursday. The British pound has turned volatile in recent weeks as opinion polls narrowed ahead of the vote. A yes decision could trigger turmoil in the market as investors ponder the economic and financial fallout. The pound was up 0.3 percent Tuesday at $1.6277.

Bonds: Bond prices rose, tugging down the yield on the 10-year Treasury note to 2.57 percent from 2.59 percent late Monday. Yields fall when bond prices rise.

by Bernard Condon, AP Business Writer

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The Gayly – September 16, 2014 @ 1pm