Stocks Gain ahead of Fed Meeting

U.S. stocks began higher on Tuesday as a drop in housing starts supported optimism that the Federal Reserve might stimulate the economy. The Dow Jones Industrial Average lately added 39.54 points to 12,781.36. The S&P 500 Index rose 6.87 points to 1,351.65. The Nasdaq Composite added 19.29 points to 2,914.62.

U.S. builders started work on new homes in May at a slightly slower pace compared to the prior month, but permits for future construction jumped to the highest level in nearly four years, the Commerce Department reported Tuesday. Housing starts fell 4.8% last month to an annual rate of 708,000.  Permits for future construction rose to an annual rate of 780,000 in May from an upwardly revised 723,000 in April.

The Federal Reserve is meeting this week at a time of high alert — over the slumping U.S. economy, the aftermath of the Greek elections and the shaky financial markets.

FedEx Corp (NYSE:FDX) said on Tuesday that it earned $550 million, or $1.73 a share in its fiscal fourth quarter, compared to $558 million, or $1.75 a share a year ago. Excluding a $634 million aircraft impairment charge it took in the quarter, the company reported a $634 million or $1.99 a share profit. Revenue at the freight shipper rose to $11 billion in the quarter from $10.6 billion a year ago.

Walgreen Co. (NYSE:WAG) agreed to buy a 45% stake in the pharmacy-led health and beauty group Alliance Boots GmbH in a $6.7 billion cash and stock deal in an effort to succeed in a changing global health and well-being market.

Oracle Corp. surprised investors Monday afternoon by reporting results for its fourth fiscal quarter three days earlier than planned. For the period ended May 31, Oracle reported net income of $3.5 billion, or 69 cents per share, compared with net income of $3.2 billion or 62 cents per share for the same period the previous year. Revenue rose by 1% to $10.9 billion.