Trader Anthony Riccio works on the floor of the New York Stock Exchange Tuesday, Dec. 11, 2012. Stocks opened higher Tuesday ahead of a meeting of the Federal Reserve and possible additional steps to bolster the U.S. economy. (AP Photo/Richard Drew)
Trader Anthony Riccio works on the floor of the New York Stock Exchange Tuesday, Dec. 11, 2012. Stocks opened higher Tuesday ahead of a meeting of the Federal Reserve and possible additional steps to bolster the U.S. economy. (AP Photo/Richard Drew)
NEW YORK (AP) ? Stocks edged higher, extending a winning streak, as investors awaited news on whether the Federal Reserve will announce more bond purchases to stimulate the U.S. economy. Wall Street also watched for developments from budget talks in Washington.
The Dow Jones industrial average was up 13 points at 13,262 as of 10:50 a.m. in New York. The Standard and Poor's 500 was up two points at 1,432. The Nasdaq composite was up 0.2 points at 3,022.
The U.S. central bank is expected to announce a revamped bond-buying plan at the end of a two-day policy meeting Wednesday to help hold down interest rates and encourage borrowing. The expectation is that the Fed will unveil a program Wednesday to buy $45 billion a month in long-term Treasurys. That would replace a program that expires at the end of the year.
In Washington, lawmakers are still trying to reach a deal to avoid the "fiscal cliff," a series of sharp tax increases and spending cuts that will hit the economy in January if Congress and President Barack Obama are unable to thrash out an agreement to reduce the U.S. budget deficit.
House Speaker John Boehner and Obama spoke on the phone Tuesday, a day after the president offered to reduce his initial demand for $1.6 trillion in higher tax revenue over a decade to $1.4 trillion. Obama continues to insist that much of the revenue comes from raising top tax rates on the wealthy.
Both the Dow and the S&P have advanced for the past five days as optimism increased that a deal can be struck. The S&P is trading at its highest in five weeks and has now erased all of its post-election losses. Stocks fell immediately after the vote Nov. 6 on concern that a divided government would struggle to resolve the budget issue.
"There's some optimism that we are going to have some sort of an agreement on the cliff before December 31," said JJ Kinahan, Chief Derivatives Strategist for TD Ameritrade. More Fed stimulus is "pretty much mostly priced in," he said, because policymakers would be unlikely to risk disappointing market expectations given the concerns about the unresolved fiscal situation.
Chemicals giant DuPont advanced 81 cents to $44.48 after the company unveiled plans to buy back up to $1 billion of its shares next year and said that profit for this year will reach the high end of its forecasts.
The yield on the 10-year Treasury note was little changed 1.66 percent.
Other stocks making big moves:
?Eli Lilly and Co. fell $1.57 to $49.03 after the Indianapolis drugmaker it will conduct the additional, late-stage study of its possible Alzheimer's treatment solanezumab. The move delays a regulatory decision on a drug that flashed potential to help patients with mild cases of the disease.
?Health insurer Aetna Inc. rose $1.93 to $46.40 after the company said late Tuesday that it expects sales and profit to grow next year.
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