Wall Street ended its three-day losing streak on Tuesday by adding more than 300 points on the Dow in a broad rally that only picked up steam after the Federal Reserve decided not to raise interest rates.  

Today's Market

The Dow Jones Industrial Average jumped 331.62 points, or 2.94% to 11615.77, the Standard & Poor’s 500 index gained 35.86 points, or 2.87%, to 1284.87 and the Nasdaq Composite Index picked up 64.27 points, or 2.81%, to 2349.83. The consumer-friendly FOX 50 added 25.76 points, or 2.91%, to 912.19.

The triple-digit surge for the blue chips represents the index's best days since April 1 and a serious rebound from three straight days in the red. Well before the Fed decision was announced the Dow was 230 points in the green thanks to another decline in oil prices and a better-than-expected report on the nation's service sector. 

“The rally is more about oil than the Fed. It was a given a week ago that the Fed wasn’t going to cut or raise rates," Alan Valdes of Hilliard Lyons told FOX Business. 

Insurer AIG (AIG) led the blue-chip advancers on Tuesday, surging 12% after it was upgraded by UBS to "buy" from "neutral." Also, financial conglomerate Citigroup (C) and Boeing (BA) posted sizable huge gains of more than 5% a piece. Energy giant Chevron (CVX) was the lone declining blue-chip stock, closing just slightly lower. 

The stock market had a positive response to the Federal Open Market Committee’s decision to keep the Federal Funds rate -- the interest charged on overnight loans between banks -- at 2%. This marked the second consecutive meeting when the FOMC left rates steady, following a string of seven straight interest rate cuts dating back to last September that were aimed at boosting the economy. 

"I think this was exactly what the market was looking for," said Peter Cardillo, chief market economist at Avalon Partners. 

Economists and market participants have said that the current economic conditions have placed the central bank between a rock and a hard place. In other circumstances, the ongoing rising inflation could trigger rate hikes from the current historic-lows. However, many believe the economy remains too weak to significantly raise interest rates, which could hurt economic growth.

The Fed gave a decidedly balanced statement, saying: "Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the committee." Looking ahead, the market expects the Fed to raise rates by the end of this year or more likely at the start of 2009.

“I think the Fed has time to wait and see what goes on down the road before they begin to fight inflation by raising interest rates,” Lyle Gramley, former Fed governor, told FOX Business. 

For the second day in a row crude oil futures took a tumble, falling below $120 a barrel. Oil futures closed down $2.24 to $119.17 a barrel.  

There were several bearish factors weighing on the price of oil on Tuesday, including strong gains for the dollar, which rose 0.7% against the euro. Also, fears that Tropical Storm Edouard will cause major oil headaches in the Gulf of Mexico have dissipated. Oil prices have been pushed lower over the past month as new reports show lower demand, especially for gasoline. 

The day's lone economic report, the Institute for Supply Management's non-manufacturing index, declined slightly from June but topped expectations. The ISM index, which measures service sector activity, registered a 49.5 reading, better than the 48.0 reading economists had been forecasting. Still, a sub-50 reading indicates the sector contracted. 

On the earnings front, consumer products giant Proctor & Gamble (PG) reported a 33% jump in second-quarter profit. The company, which is one of 30 components of the Dow, posted adjusted-earnings of 80 cents per share, topping estimates by two pennies. 

After the closing bell, both tech giant Cisco (CSCO) and media company News Corporation (NWS) posted better-than-expected quarterly results likely to influence the stock market in the morning. (Rupert Murdoch's News Corp. is the parent company of FOX Business.) 

Corporate Movers

Freddie Mac (FRE) CEO Richard Syron rejected internal warnings that might have kept the mortgage giant from the current mess it finds itself in, The New York Times reported. In 2004, Syron received a memo from the company's chief risk officer warning of questionable loans that posed a serious risk to the company's financial health, the newspaper reported, citing more than two dozen current and former high-ranking executives and others. Freddie Mac and fellow mortgage giant Fannie Mae (FNM) were the subjects of an emergency, Treasury-led backstop plan that was recently signed into law as liquidity fears caused their stocks to plunge. 

Yahoo's (YHOO) recent shareholder vote that re-elected CEO Jerry Yang and the rest of the board under-reported the number of dissenting votes due to a truncation error, The Wall Street Journal reported. Broadridge Financial Solutions, the vote tabulator that was asked to review the results by a large shareholder, reportedly said the under-reporting didn't change the overall outcome in the election. Yang originally was reported as having received 85% of the vote despite being under intense pressure after Microsoft (MSFT) walked away from a buyout offer of the Internet company. 

AIG (AIG) was the best performing blue-chip stock on Tuesday thanks to an analyst upgrade to “buy” from “neutral” by USB, citing valuation. The analyst also said AIG, which is the largest insurer in the world, can take more losses without raising more cash. While UBS said AIG still faces challenges from the credit crisis, economic weakness and other issues, it also upgraded its price target to $41 from $35.

Goldman Sachs (GS) didn’t join in the broad financial rally on Tuesday as an analyst at Merrill Lynch slashed the firm’s third-quarter earnings per share view to $2.80 from $4.28. Merrill also cut its 2008 earnings estimate to $15.27 a share from $17.71 and its price target on Goldman to $205 from $212.

Archer Daniels Midland (ADM), one of the nation's biggest producers of ethanol, posted a 61% dive in fiscal fourth-quarter profit, widely missing consensus estimates. The company earned 58 cents per share on a 78% jump in revenue to $21.78 billion. Analysts polled by Thomson Reuters had been expecting earnings of 68 cents on revenue of $15.36 billion. 

D.R. Horton (DHI), the largest home builder in the U.S, posted a quarterly loss of $1.26 a share, widely missing  analysts' estimate of 70 cents a share. The company's fiscal third-quarter revenue fell to $1.43 billion from $2.55 billion a year ago. 

Dish Network (DISH) Chairman and CEO Charles Ergen is mulling another merger attempt with rival DirecTV (DTV), The Wall Street Journal reported. The news comes after Dish, the No. 2 satellite TV company, posted its first quarterly loss in subscribers on Monday. A previous merger attempt by Ergen failed in 2001 when it hit regulatory blocks, the newspaper reported. No formal proposals between the two companies have been made but Dish and DirecTV executives have had some general discussions about a merger in recent months, the Journal reported. 

Alcatel-Lucent (ALU) is hunting for a new CEO and/or Chairman after the telecom was turned down by BT Group chief Ben Verwaayen a few days ago, The Wall Street Journal reported. Last week the company announced CEO Patricia Russo and Chairman Serge Tchuruk would be leaving after two years. According to the Journal, the two leaders separately told the board last month they could no longer work together. Looking ahead, Alcatel-Lucent will likely be looking for an outsider to lead the company and may decide to fold the two top jobs into one, the newspaper reported. 

MGM Mirage (MGM) rose 15% after the second-largest casino operator in the world posted mixed quarterly results. The company's profit slid 69% to 40 cents per share and its revenue fell 2%to $1.9 billion. Analysts had been expecting 42 cents in earnings and $1.88 billion in revenue from Mirage, which owns the Bellagio and other Las Vegas casinos.

Marvel Entertainment (MVL), the comics publisher of "Spider-Man" and others, saw its stock dive 8% despite boosting its 2008 forecast and beating the Street. The company's profit rose by 60% to 59 cents per share as its revenue increased to $156.9 million. Analysts had been looking for 44 cents on $130.9 million, according to Thomson Reuters. While Marvel now sees 2008 earnings of $1.55 a share to $1.75, analysts had been expecting $1.87. 

World Markets

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, gained 90.83 points, or 2.76%, to 3380.09. The FTSE 100, London's benchmark index, rose 134.30 points, or 2.52%, to 5454.50.

On the continent, Paris' CAC 40 picked up 105.72 points, or 2.47%, to 4386.35, while Germany's DAX added 168.89 points, or 2.66%, to 6518.70.

In Asia, Hong Kong's Hang Seng slid 565.17 points, or 2.51%, to 21949.75 while Japan's Nikkei 225 fell 18.52 points, or 0.14%, to 12914.66.