Stocks Advance as Fed Taper Talk Ebbs

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NEW YORK (TheStreet) -- Major U.S. stock markets pushed higher Tuesday as investors anticipated that theFederal Reserve won't announce steps to aggressively curb the bond-buying program that has helped drive equities for more than a year.

The S&P 500 tacked on 0.78% to 1,651.80 while the Dow Jones Industrial Average gained 0.91% to 15,318.23. The Nasdaq popped 0.87% to 3,482.18.

The Fed began a two-day policy meeting today amid signs that inflation hasn't spiked as a result of the bank's stimulus measures, and data showing that the country's housing market remains months if not years away from a full recovery.

"Data this morning specifically related to inflation suggests that the Fed's not going to change anything related to what was said in mid-May" about potentially curbing the bond buying, said Todd Salamone, director of research at Schaeffer's Investment Research.

The Bureau of Labor Statistics reported Tuesday that the consumer price index rose by a less than expected 0.1% in May after falling 0.4% in April. Economists on average were expecting the CPI to rise 0.2%. Excluding food and energy, the core CPI increased 0.2%, as expected, after rising 0.1% the prior month.

The Census Bureau meanwhile reported that housing starts rose 6.8% to a seasonally adjusted annual rate of 914,000 in May, which was less than the 950,000 pace expected by economists. Building permits last month fell 3.1% to a lower than expected seasonally adjusted annual rate of 974,000. Economists were predicting a pace of 975,000 for building permits.

Written by Andrea Tse and Joe Deaux in New York

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