U.S. stocks rally as Fed worries ease

U.S. stocks rose Tuesday, with the Dow Jones Industrial Average hitting a record intraday high, boosted by expectations that the Federal Reserve may not send out a hawkish tone Wednesday at the conclusion of its policy meeting. The Dow jumped 100.83 points, or 0.59 percent, to 17,131.97. The S&P 500 climbed 14.85 points, or 0.75 percent, to 1,998.98. The Nasdaq Composite Index surged 33.86 points, or 0.75 percent, to 4, 552.76.

The market reversed earlier losses to regain steam when remarks came out in the late morning session by The Wall Street Journal's chief economics correspondent Jon Hilsenrath. He said that the U.S. central bank may not drop the language of "considerable time" to describe when it may raise rates.

The blue-chip Dow set an all-time high of 17,167.05 points in the intraday trading, but ended at a level still shy of its record close.

Investors had previously expected the Fed to shed more light on the timing of the first interest rate hike at the two-day policy meeting starting on Tuesday, which has had Wall Street move back and forth recently.

The Fed is slated to release a policy statement Wednesday afternoon, to be followed by Fed Chair Janet Yellen's press conference and the latest economic projections.

On the economic front, the U.S. Producer Price Index for final demand was unchanged in August thanks to falling energy and food costs, said the Labor Department. The muted wholesale prices in August followed a 0.1-percent rise in July.

In corporate news, China's e-commerce giant Alibaba late Monday lifted its initial public offering (IPO) price range to 66 U.S. dollars to 68 dollars per American depositary share (ADS), up from the previous range of 60 dollars to 66 dollars, as the company received overwhelming demand from investors.

But the company and the selling stockholders will still offer a total of 320.1 million ADSs, taking the size of the IPO to about 21.4 billion dollars at the midpoint of the new range, expected to be the largest in U.S. IPO history.

On the previous trading day, U.S. stocks ended mixed, with the tech-heavy Nasdaq slammed by falling tech shares, as some investors repositioned by selling high-flying tech shares to make room for Alibaba.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, slumped 9.84 percent to end at 12.73 on Tuesday.

In other markets, oil prices gained as the secretary general of the Organization of Petroleum Exporting Countries said they may cut the production targets next year. Light, sweet crude for October delivery gained 1.96 dollars to settle at 94.88 dollars a barrel on the New York Mercantile Exchange.

Gold futures on the COMEX division of the New York Mercantile Exchange continued to go up, with the most active gold contract for December delivery rising 1.6 dollars, or 0.13 percent, to settle at 1,236.7 dollars per ounce.

The U.S. dollar weakened against major currencies as investors took profits from recent gains of the greenback, while awaiting the results of the Fed meeting.

In late New York trading, the euro rose to 1.2961 dollars from 1.2937 dollars of the previous session, and the dollar bought 107. 15 Japanese yen, lower than 107.20 yen of the previous session.