The minutes from the Federal Open Market Committee's Sept. 18 meeting, when Fed governors voted unanimously to cut rates a half percentage point, also showed that officials were concerned that the weakness in the dollar could lead to higher inflation. But the Fed — signaling it is more willing to intervene — also said the economic outlook was uncertain because of the summer's credit crisis, and that there were still risks to growth that justified lower rates.

The major indexes were little changed just before the minutes came out, and then rose sharply. Investors were hoping that the Fed would lean toward future rate cuts; central bankers will meet again Oct. 30-31.

"This adds fuel to the fire that the Fed is going to try and reinvigorate the economy with further cuts, and that's what they are committed to," said Richard E. Cripps, chief market strategist for Stifel Nicolaus. "The likelihood of having a second cut either this month or at the December meeting seems greater than before the minutes."

Further, Federal Reserve Bank of St. Louis President William Poole said during a speech Tuesday he believes the financial markets are "still fragile" from weakening credit conditions, but that it appears to be stabilizing. He pointed out that the fallout in the subprime mortgage sector, where mortgages are issued to homebuyers with poor credit, was one of the catalysts to financial market turmoil.

MAJOR INDEXES SOAR

According to preliminary calculations, the Dow rose 120.80, or 0.86 percent, to 14,164.53, eclipsing the previous record close of 14,087.55 reached Oct. 1. The Dow had a new trading high as well, rising to 14,166.97.

The S&P rose 12.57, or 0.81 percent, to a record close of 1,565.15. It surpassed the previous record close of 1,557.59, reached last Friday, and also hit a new trading high of 1,565.26.

The Nasdaq composite index rose 16.54, or 0.59 percent, 2,803.91.

Bonds slipped after the Fed minutes were released, with the 10-year Treasury note yield — which moves inversely to its price — rising to 4.65 percent from 4.62 percent before the minutes' release. The Treasury market was closed Monday for Columbus Day, and its yield was 4.64 percent on Friday.

While Wall Street was focused on a possible rate cut, bond investors were concerned with the fact that the Fed's economic outlook is uncertain.

The dollar was generally lower against other major currencies, while gold prices rose. Light, sweet crude rose $1.24 cents to $80.26 on the New York Mercantile Exchange.

Investors have been waiting for any clue about the Fed's plans for the rest of the year, with most economists expecting a rate cut before the year is out. However, those hopes were somewhat dashed on Friday after the government reported better-than-expected employment numbers that eased fears the economy would slide into a recession.

Policymakers during the Sept. 18 meeting believed that "some further slowing of employment growth was likely." They also felt — before seeing the jobs report — that a further slowing in employment was likely this year.

CORPORATE NEWS

In corporate news, Yum Brands Inc. rose $1.82, or 5 percent, to $38.11 after the company on Monday reported stronger-than-expected third-quarter profits. While revenue in the U.S. declined, strong international sales boosted results.

Sprint Nextel Corp. fell 22 cents to $18.28 after the phone company said after the bell Monday its Chairman, President and Chief Executive Gary Forsee would step down. The company also warned it expects full-year operating revenue to come in slightly below its targeted range.

Molson Coors Co. shares rose $5.32, or 10.4 percent, to $56.15 after the brewer said it plans to combine its U.S. brewing operations in an effort to compete better against industry leader Anheuser-Busch. The joint venture announced will be known as MillerCoors and will have responsibility for selling brands including Miller Lite, Miller Genuine Draft, Coors, Coors Light and Molson Canadian in the U.S.

NBC Universal said Tuesday it is buying female-oriented cable television network Oxygen Media for approximately $925 million. General Electric Co., the parent of NBC, rose 49 cents to $42.02.

Google Inc. rose again Tuesday after closing above $600 for the first time Monday. The stock rose $5.57 to $615.18.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.09 billion shares, up from 1 billion shares on Monday.

The Russell 2000 index of smaller companies rose 5.58, or 0.66 percent, to 845.72.

Overseas, Japan's Nikkei stock average rose 0.56. Britain's FTSE 100 rose 1.14 percent, Germany's DAX index rose 0.08 percent, and France's CAC-40 advanced 0.56 percent.

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