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Wall Street Gains as Fed Wraps First Day of Meetings, Crude Oil Rises

Stock indexes rallied as the U.S. Federal Reserve's Federal Open Markets Committee wrapped its first day of meetings and crude oil prices surged.

The Dow Jones Industrial Average rallied by more than 100 points for a second straight day as a substantial gain in the energy complex, and expectations for the Federal Reserve to give the economy a vote of confidence Wednesday drove the blue-chip index through key technical resistances.

The Nasdaq Composite was back over 5,000 before surrendering some of its gains before the close.

All 10 sectors of the Standard & Poor's 500 are in the green with energy and financial stocks outperforming. Dow component stocks Exxon ( XOM ) and Chevron ( CVX ) were the leaders, followed by gains of at least 3% in financial stocks JP Morgan ( JPM ) and Goldman Sachs ( GS ) on the likelihood for higher U.S interest rates.

Tuesday's economic data provided more ammunition for the Fed to tighten tomorrow as the annual consumer price index was above 2% for the first time in three years, and manufacturing activity in the New York Fed region improved. Activity still contracted for the fifth straight month.

Only the homebuilders' housing market index was below expectations as it fell to 61 from 62 in November, missing estimates to increase to 63.

Since a rate hike is widely expected, the only variable is the direction the Fed will take in 2016.

Wall Street will be dissecting the statement for clues such as the inclusion of the phrase "gradual pace" and exclusion of "next meeting" as the former indicates cautious monetary policy, and the exclusion of the latter means the Fed is holding back on further moves.

Lumber Liquidators ( LL ) jumped almost 25% after hedge fund manager Whitney Tilson covered his $2.3 million short position.

Neothetics, a pharmaceutical company, lost 82% of its value after its LIPO-202 top line phase 3 trial did not meet composite and secondary endpoints.

The Dow rose 0.9%, the S&P gained 1.1% and the Nasdaq Composite Index added 0.9% on Tuesday.

In global stocks, the FTSE 100 gained 2.5% while the Nikkei declined 1.7%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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