The US dollar remained confined to a narrow trading range in New York as traders positioned themselves ahead of tomorrows FOMC rate decision.
Federal Reserve is widely expected to raise its benchmark interest rate by 25 basis points, bringing it up to 2.50 percent. As the outcome of the meeting is anticipated, markets are awaiting the statement by Committee Chairman, Alan Greenspan, as it will set the tone for the next FOMC meeting.
US manufacturing grew at the slowest pace since September of 2003, as reported by the Institute for Supply Management. ISM manufacturing index fell to 56.4 for January, down from 57.3 in December, as manufacturers received less orders. On the positive side, construction spending gained 1.1 percent in December and was up 9 percent for 2004. The gain in construction spending comes as the demand for residential and commercial real estate increased.
The US dollar was quoted at 1.3034-37 against the euro, 1.8823-27 versus the British pound and 103.70-74 against the Japanese yen at 22:30 GMT.
US stocks gained as crude oil prices receded and were further boosted by positive news from a number of companies.
The Dow Jones Industrial Average rose 0.6 percent, to 10,551.94. The NASDAQ Composite Index increased 0.3 percent, to 2068.70. The Standard and Poor's 500 index gained 0.7 percent, to 1189.41.
American Express rallied 6.4 percent to $56.75 after the company announced it will spin off its brokerage unit.
Valero Energy gained $4.93 to $56.96 as the company announced better than expected quarterly earnings.
Zimmer, a prosthetics company jumped 11 percent to $87.40 after the company raised its full year guidance.
The NYMEX crude oil futures contract for March delivery fell $1.08 to 47.12 per barrel on speculation that inventories increased over 2 million barrels from last week.
The COMEX gold futures contract for April delivery fell $1.40 to $422.70 an ounce despite lack of direction from currency markets.
US government bonds were little changed as markets awaited the statement following the FOMC rate decision widely expected to be a 25 basis point increase. Federal Reserve increased its benchmark five times over the past year citing the need to combat inflationary pressures brought on by volatility in energy prices. US Treasury bond futures contract for March delivery was up 0.01 to 112.09.