(Updates to close)

By Ryan Vlastelica

NEW YORK (Reuters) - The S&P 500 closed ata four-month high Monday as a long-awaited break above atechnical range and a flurry of positive corporate newsincreased investor optimism.

The break came a day before a Federal Reserve meeting inwhich the central bank is expected to renew a promise to keepits portfolio from shrinking but is not seen taking new stepsto ease monetary policy.

The S&P 500 has struggled to make a sustained move above1,130, which has been the upper end of a range that haspersisted since June. Monday's gains could be a shot in the armif it sways institutional investors that September's rally of8.9 percent by the benchmark S&P index has further to go.

"We've been waiting for this level to be penetrated, andbreaching it makes it hard to be too negative right now," saidFrank Gretz, market analyst and technician at Shields & Co inNew York.

IBM was among the top boosts to the Dow after itagreed to buy Netezza Corp for $1.7 billion in thelatest in a string of large tech deals. Shares of IBM rose 1.2percent to $131.78.

Volume was light with about 7.16 billion shares traded onthe New York Stock Exchange, the American Stock Exchange andNasdaq, below last year's estimated daily average of 9.65billion. Recent days have seen weak to moderate volume, andtraders are looking for a pick-up in trading to confirm themarket has made a convincing breakout.

The Dow Jones industrial average was up 145.77points, or 1.37 percent, at 10,753.62. The Standard & Poor's500 Index was up 17.12 points, or 1.52 percent, at1,142.71. The Nasdaq Composite Index was up 40.22points, or 1.74 percent, at 2,355.83.

The National Bureau of Economic Research said that thelongest recession since World War Two officially ended in June2009, though that didn't mean the economy had "returned tooperating at normal capacity."

The bureau's announcement "is a nice shot in the arm,psychologically, since it suggests more progress than someparts of the market had allowed for," said Bruce McCain, chiefinvestment strategist at Key Private Bank in Cleveland, Ohio."It suggests an opening of potential going forward."

A few weeks before earnings season begins in earnest, twocompanies rallied on higher-than-expected profits. HomebuilderLennar Corp surged 8.2 percent to $15.14 while DiscoverFinancial Services added 3.8 percent to $16.16.

Advancing stocks outnumbered declining ones on the NYSE bya ratio of about five to one, while on the Nasdaq, advancersbeat decliners by more than three to one.

Gold hit record highs for a fourth straight day asspeculation the Fed may announce further moves to stimulate theeconomy piqued interest in the precious metal. The Arca GoldBugs index, which tracks the performance of 16U.S.-traded gold producers, rose 1.4 percent, with Kinross Goldup 3.4 percent to $18.82.

On the downside, International Paper Co fell 6.4percent to $21.92 after an influential trade magazine reportedthat it believed packaging producers have not been able toincrease container board prices to customers.

Also on Monday, a survey showed U.S. homebuilder sentimentheld steady in September, pointing to a still-weak housingmarket.

The S&P broke above a short-term resistance level of 1,140,the 61.8 Fibonacci retracement of its 2010 high-to-low slide. (Additional reporting by Rodrigo Campos; Editing by KennethBarry)