Most regional stocks closed higher Tuesday, boosted by favorable economic news about inflation and housing.
Among the biggest percentage gainers locally were YRC Worldwide, Kansas City Southern, O’Reilly Automotive, Garmin, and H Block.
The region’s biggest public company, Sprint Nextel, closed 1.4 percent higher.
The few losers included Capitol Federal Financial and DST.
Overall, stocks moved higher Tuesday. But the Federal Reserve loomed large, with investors trying to guess what the central bank will say Wednesday about how long it plans to keep stimulus programs in place. For many, the market was in a holding pattern as investors waited for Wednesday's announcement.
The market's gains were steady and broad. The Standard Poor's 500 index rose 12.77 points, or 0.8 percent, to 1,651.81. All 10 of its sectors rose, led by industrial and telecommunications companies. The Russell 2000, an index of smaller companies, closed at a record high but fell just shy of the 1,000-point milestone.
In other trading, the Dow Jones industrial average rose 138.38 points, or 0.9 percent, to 15,318.23. The Nasdaq composite index rose 30.05 points, or 0.9 percent, to 3,482.18.
The BATS 1000 rose 142.87 points, or 0.78 percent, to close at 18,523.09.
Tuesday's wait-and-see vibe came from a familiar template. The Fed has had an outsized effect on the stock market in recent weeks, with the major indexes getting yanked back and forth as investors try to guess how long the central bank will keep supporting the U.S. economy.
Some investors say it's troubling that the market is relying more on the central bank for direction than economic fundamentals. The latest turning point was May 22, when Fed Chairman Ben Bernanke startled markets by announcing that the central bank could soon pull back on its bond-buying program if the economy improves.
“Here we are again,” said Gregg Fisher, founder and chief investment officer of Gerstein Fisher in New York. “We don't know what the actions will be. We're all trying to figure that out.”
The Fed's role in the market has swelled since the 2008 financial crisis. The central bank, which traditionally has been best-known for helping set interest rates, has taken an increasingly bigger role in trying to amp up the economy. Its bond-buying program is meant to keep interest rates low, which can encourage borrowing and drive investors into the stock market. The Fed's purchases have swollen its portfolio to $3.4 trillion, a four-fold increase since before the crisis.
“The game is different from what it used to be,” said Mark Spellman, portfolio manager for Value Line Funds in New York. “It's not just, `Is the Fed going to raise (its benchmark interest rate) up or down?“’ It's `Is the Fed going to keep buying $85 billion worth of bonds each month?“’
Analysts predicted that Bernanke would use his Wednesday news conference to cast a reassuring tone and make it clear that the Fed won't pull back on any of its programs until it's sure the economy can handle it. He's also likely to drop more hints about when the Fed could start trimming its stimulus programs. Some said that recent market volatility hasn't been caused by fear that the Fed will pull back on its stimulus programs – most everyone expects that to happen eventually. It's more because investors don't want to be surprised when it does.
Brian Doe, wealth adviser at Gratus Capital in Atlanta, described the Fed's policy announcements as “the big wind” that could push the market around.
“Right now the wind is not blowing,” Doe said. “We have this little calm where everybody can be optimistic.”
The Commerce Department reported that the pace of new home building increased in May, helped by more buyers coming to the market and a scarcity of houses for sale. Investors described the report as good enough to send the market up, but not good enough to force the Fed to start thinking that the economy is fine and abruptly slash its stimulus efforts.
The Labor Department reported that U.S. consumer prices rose last month, but only slightly. That's also likely to influence the Fed's decisions. The Fed knows that its stimulus programs can lead to inflation. If inflation is in check, however, that gives the Fed more leeway to continue the programs.
Capitol Federal Financial fell 6 cents, or 0.50%, to close at $11.99.
Cerner Corp. rose 79 cents, or 0.80%, to close at $99.01.
Commerce Bancshares Inc. rose 15 cents, or 0.35%, to close at $43.47.
Compass Minerals rose 67 cents, or 0.79%, to close at $85.93.
DST Systems Inc. fell 15 cents, or 0.22%, to close at $67.83.
Ferrellgas Partners L.P. was unchanged at $21.98.
Garmin Ltd. rose 82 cents, or 2.35%, to close at $35.76.
Great Plains Energy rose 19 cents, or 0.83%, to close at $23.11.
H Block Inc. rose 35 cents, or 1.21%, to close at $29.22.
Inergy L.P. fell 8 cents, or 0.33%, to close at $24.03.
Kansas City Life Insurance Co. rose 17 cents, or 0.45%, to close at $38.35.
Kansas City Southern rose $2.20, or 2.00%, to close at $112.18.
Layne Christensen Co. rose 76 cents, or 3.74%, to close at $21.09.
O'Reilly Automotive Inc. rose $1.14, or 1.02%, to close at $113.09.
Sprint Nextel Corp. rose 10 cents, or 1.39%, to close at $7.32.
UMB Financial Corp. rose 59 cents, or 1.13%, to close at $52.60.
Waddell Reed Financial Corp. rose 29 cents, or 0.62%, to close at $47.15.
YRC Worldwide Inc. rose 74 cents, or 3.29%, to close at $23.25.