[NEW YORK] US stocks snapped a two-day losing streak on Tuesday, finishing solidly higher ahead of a Federal Reserve policy announcement expected to shed light on the timing of interest rate hikes.
The Dow Jones Industrial Average gained 113.31 points (0.64 per cent) to 17,904.48.
The broad-based S&P 500 rose 11.86 (0.57 per cent) to 2,096.29, while the tech-rich Nasdaq Composite Index advanced 25.58 (0.51 per cent) to 5,055.55.
Michael James, managing director of equity trading at Wedbush Securities, said US stocks remain in a "very tight" trading range.
Day-to-day movements are due to trader "emotion and sentiment and positioning ahead of the Fed announcement" on Wednesday, he said.
Better jobs and retail sales data have altered the outlook somewhat for US monetary policy after a weak first quarter. Although the Fed is not expected to lift interest rates Wednesday, Chair Janet Yellen could signal a move is near.
Equity markets in France and Germany rebounded somewhat despite worries over a Greek debt default in the absence of a deal between Athens and international creditors.
Fragrance and cosmetics maker Coty bolted 19.3 per cent higher on reports it has reached a preliminary deal to buy beauty assets from Procter & Gamble for as much as US$12 billion. Dow member P&G gained 1.3 per cent.
Gap advanced 1.4 per cent following its announcement it will close 175 stores in North America and eliminate 250 headquarters jobs.
Leading health insurers were mostly higher following reports of merger talks between various players.
Aetna, which was fingered in some reports as an acquisition target, rose 3.3 per cent. Anthem (+1.5 per cent), Cigna (+0.4 per cent) and United Health (+2.2 per cent) rose, but Humana dropped 3.4 per cent on worries it could be left without a partner.
Bond prices rose. The yield on the 10-year US Treasury dropped to 2.31 per cent from 2.36 per cent Monday, while the 30-year slid to 3.04 per cent from 3.09 per cent. Bond prices and yields move inversely.