Wall Street expects the Fed's Open Market Committee to raise short-term interest rates by another 0.25 percentage point at the conclusion of its two-day meeting tomorrow. The statement that accompanies the decision will also be closely examined for clues about what lies ahead. Worry about the Fed meeting kept some investors on the sidelines, but trading was still brisk — a fact analysts found encouraging after January's steep declines.

"I think what we've got here is a market that looks like it's on the mend," said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels in Minneapolis. "To me, you can only say the surprises in the economy and in earnings have been positive this year. Of course, there are some participants who won't do anything until they see what the Fed is going to do."

The Dow Jones industrial average closed up 62.00, or 0.59 percent, at 10,551.94.

The broader gauges were also higher. The Standard & Poor's 500 index rose 8.14, or 0.69 percent, to 1,189.41. The Nasdaq composite index added 6.29, or 0.31 percent, to 2,068.70.

Economists were somewhat disappointed by the Institute for Supply Management's report on manufacturing. The private research group's index of manufacturing activity affirmed the rebound at the nations' factories, but not at the pace economists expected. The reading came in at 56.4, down from a revised 57.3 in December, and just under forecasts of 57.

Oil prices, which have stayed uncomfortably high despite the relative success of weekend elections in Iraq and OPEC's decision to maintain its current production targets, declined slightly amid concerns that the oil cartel might cut output soon. Crude futures settled down $1.08 at $47.12 on the New York Mercantile Exchange.

January was an uncharacteristically poor month for stocks, with the S&P 500 dropping 2.53 percent. This has raised some concern on Wall Street, because January's performance often foreshadows how trading will go for the rest of the year. However, some have pointed out that while a good January often heralds a strong year, a down January has led to a down year only about half the time. Still, post-election years tend to be weak, which has some market watchers advising caution.

"You're definitely seeing some institutions out there that held back in January that would've been out there had the markets gone up instead," said Bill Groenveld, head trader at vFinance Investments. "I do believe, however, that if we break this downtrend and have a solid move up, we'll see more people getting back in."

Lifting the Dow, financial services giant American Express Co. surged 6.4 percent, or $3.40, to $56.75, after announcing plans to spin off its financial advisory business to its shareholders and focus on its charge and credit card, payments processing and travel businesses. Shareholders were to get all of the stock in the new company; the spinoff is expected to be completed in the third quarter.

Also among Dow stocks, the Walt Disney Co. added 17 cents to $28.80 after increased revenue from cable channels and a boost in attendance at its theme parks helped it produce higher-than-expected profits, overcoming lower income at its film studio and in its consumer products division. The company said it continues to expect double-digit earnings growth this year and through 2007.

Among the day's decliners, Tyco International Ltd. lost 4.5 percent, or $1.63, to $34.51, after the conglomerate reported a 1.4 percent drop in quarterly profits as charges for early retirement of debt and divestitures outweighed surging sales. Excluding the charges, earnings matched Wall Street forecasts.

In other earnings news, medical device maker Boston Scientific Corp. rose 5.3 percent, or $1.75, to $34.81, after beating per-share earnings estimates by a penny thanks to a sharp rise in sales of coronary stents, which more than offset one-time charges from stock option modifications and a change in tax law.

MGM Mirage Inc. gained 2.8 percent, or $1.98, to $73.79, after the owner of the Bellagio and MGM Grand casinos posted lower fourth-quarter earnings due to hefty gains in the year-ago period. But strong customer spending and significant room rate increases helped boost profit above Wall Street expectations. Revenues rose 11 percent, and the company reiterated its forecast for the current quarter.

Advancers outnumbered decliners by about 2 to 1 on the New York Stock Exchange. Preliminary consolidated volume came to 2.17 billion shares, compared with 2.01 billion traded yesterday.

The Russell 2000 index, which tracks smaller company stocks, was up 4.12, or 0.66 percent, at 628.14.