Wall Street widely expects the Fed to cut its fed funds rate by a quarter-percentage point to 4.5 percent on Wednesday to prevent declining house prices and tighter credit from tipping the economy into recession. Some are speculating the Fed may surprise financial markets with a half-point cut as it did in September.
Energy stocks such as Exxon Mobil stood out on a day when U.S. crude oil futures topped $93 for the first time. That and a mining takeover in Europe added to demand for commodities-related shares overall, with aluminum producer Alcoa rising 2.7 percent to $40.43.
"People are anticipating Wednesday's rate cut, and there is speculation that the Fed might cut by 50 basis points. The 25-basis-point cut is pretty much baked in," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, in Cincinnati.
"And the metals and the steel stocks are again defying gravity as commodities shares rise and on some overseas merger news," he added.
The Dow Jones industrial average was up 63.56 points, or 0.46 percent, to end at 13,870.26. The Standard & Poor's 500 Index was up 5.70 points, or 0.37 percent, at 1,540.98. The Nasdaq Composite Index was up 13.25 points, or 0.47 percent, at 2,817.44.