1st LD Writethru: U.S. stocks jump despite downbeat data

U.S. stocks posted solid gains Tuesday, as some investors thought that a batch of soft economic reports could give the Federal Reserve an excuse to postpone rate rise on its two-day policy meeting beginning Wednesday.

The Dow Jones Industrial Average surged 228.89 points, or 1.40 percent, to 16,599.85. The S&P 500 added 25.06 points, or 1.28 percent, to 1,978.09. The Nasdaq Composite Index advanced 54.76 points, or 1.14 percent, to 4,860.52.

Traders keep a close eye on the Fed's highly-watched key policy meeting on Sept. 16-17, when the U.S. central bank could raise interest rates for the first time in more than nine years.

Some analysts, however, believed that the Fed will not start to hike rates on the meeting as a string of economic data came out weaker than expected.

The advance estimates of U.S. retail and food services sales for August increased 0.2 percent from the previous month to 447.7 billion U.S. dollars, slightly below market consensus of a 0.3-percent gain, the Commerce Department announced Tuesday.

U.S. industrial production decreased 0.4 percent in August, exceeding market expectations of a 0.2-percent decline, according to the Federal Reserve Tuesday.

Meanwhile, the September 2015 Empire State Manufacturing Survey indicates that business activity declined for a second consecutive month for New York manufacturers.

The headline general business conditions index came out at minus 14.7, up slightly from minus 14.92 in August and well below market estimates of minus 0.5.

"Orders and employment weighed on the index. It is the worst back-to-back reading since the beginning of 2009," said Jay Morelock, an economist at FTN Financial, in a note. Endit