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The Dow Jones industrial average is at its highest level since 2007 after a day of encouraging signs for the economy: Retail sales were strong, the Federal Reserve was optimistic and most of the nation’s biggest banks got a clean bill of health.

The Dow surged nearly 218 points, its biggest gain of the year. The Nasdaq composite index also reached a milestone, closing above 3,000 for the first time since December 2000.

Stocks started Tuesday higher, and momentum built throughout the day.

The government reported before the market opened that retail sales in February increased the most since September. Shortly after 2 p.m., the Federal Reserve said it expected the unemployment rate to keep falling.

Then, at about 3 p.m., JPMorgan Chase said it was raising its dividend and launching a $15 billion stock buyback program, all with the blessing of the Fed.

The Fed was planning on waiting until Thursday to release the results of its annual “stress tests” on banks, which determine which are healthy enough to raise their dividends. After JPMorgan’s announcement, the Fed released the results early.

The Fed’s action was the latest sign that the U.S. financial system was getting healthier. JPMorgan led the Dow higher, shooting up 7 percent. Other big banks including Bank of America, Goldman Sachs and Wells Fargo also gained 6 percent.

“That’s what really made the day,” said Jeffrey Kleintop, chief market strategist at LPL Financial. Banks were easily the best-performing stocks in the market, gaining almost 4 percent as a group.

The Fed’s test results had some negative outcomes, too. While JPMorgan Chase and 14 other financial institutions passed, four, including Citigroup, failed. Citigroup stock was down 4 percent in after-hours trading following the Fed announcement.

The Dow finished at 13,177.68, its highest close since Dec. 31, 2007. The close put the Dow within 1,000 points of its record, 14,164.53, set less than three months earlier. All 30 stocks in the Dow closed higher, the first time that has happened this year.

The Nasdaq composite index rose 56.22 points, or 1.9 percent, to 3,039.88.

On Dec. 11, 2000, the last time the Nasdaq closed above 3,000, it was in the middle of a horrifying slide _ from a peak above 5,000 in March 2000 to just above 1,100 in October 2002.

At the beginning of 2000, the peak of the dot-com frenzy, investors valued stocks in the Nasdaq composite index at an astronomical 175 times their per-share earnings over the previous year.

Google was not yet a public company, and the iPod didn’t exist. Apple pulled in $2.3 billion in quarterly revenue. Many Nasdaq companies were Internet startups with high stock prices but big losses.

And many of them failed, taking the Nasdaq down with them.

Jack Ablin, chief investment officer at Harris Private Bank, said the key difference between the Nasdaq then and now is that the technology companies that dominate the index only promised profits 12 years ago.

“The Nasdaq hasn’t done much of anything for 12 years, but it’s had a huge rally in earnings,” Ablin said.

Today, the profits are real. Apple reported $46 billion in revenue in its latest quarter. The Nasdaq composite, which includes more than 2,500 companies, trades at about 24 times earnings, according to Birinyi Associates.

The Standard & Poor’s 500 index closed up 24.87 points, or 1.8 percent, at 1,395.96, its highest level since June 5, 2008. The S&P has gained 11 percent since Jan. 1, more than what it posts in an average year. The S&P is a 12 percent rally from its record of 1,565.15.

Brian Gendreau, market strategist at Cetera Financial, said stocks could still go higher. Investors are paying roughly 14 times the past year’s earnings for the S&P 500 index. The long-term average is closer to 15.

“Valuations are still very cheap,” he said.

The dollar rose against the euro and hit an 11-month high against the Japanese yen after the Federal Reserve assessment. The euro fell to $1.3073 late Tuesday from $1.3150 late Monday. The dollar soared to 83.08 yen from 82.26 late Monday.

The retail sales report showed a gain of 1.1 percent last month. Some of it reflected higher gas prices, but Americans also spent more on cars, clothes and appliances. Department stores had their biggest gains in more than a year. The government also revised its estimates higher for December and January.

Retail stores reported a 6.7 percent increase in sales in February compared with the same month a year ago.

A reading of confidence among small business owners also rose in February for the sixth month in a row. The National Federation of Independent Business optimism index reached its highest level in a year, helped by an increase in expected sales.

The rally gained strength in the afternoon when the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling. The Fed also said strains in the global financial markets have eased.

The combination of strong retail sales and the Fed announcement dampened hopes that the Fed would buy more bonds to stimulate the economy, and traders dumped U.S. Treasury debt. The yield on the 10-year Treasury note climbed as high as 2.12 percent, its highest since October.

Among companies making big moves:

_ Great Wolf Resorts jumped 27 percent to $5.13. Apollo Global Management said it has agreed to buy the indoor water park operator for $5 a share.

_ Urban Outfitters dropped 5.3 percent, the worst drop in the S&P 500 index. The retailer reported earnings that fell below what analysts were expecting after it had to mark down prices on women’s clothing at its Anthropologie and Urban Outfitters stores.

_ Carmike Cinemas soared 17 percent. The Georgia-based movie theater chain reported earnings and sales that far outpaced what Wall Street analysts had expected.

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It’s still more than a day away until the Super Bowl and I’ve already seen the Volkswagen commercial that shows a pudgy dog running on a treadmill in order to lose weight.

I’ve already seen Matthew Broderick call in sick so he can ride roller coasters, chase little kids at a museum and frolic on the beach in a Ferris Bueller-like day of revelry - and driving a Honda CRV to get from place to place.

And I’ve already seen the tattoo-rific David Beckham in his undies for H&M’s new ad campaign.

So is there any reason left to tune in to the big game on Sunday night?

Oh right, I guess there is the football. But with more companies than ever uploading their Super Bowl commercials in advance on YouTube and other websites this year, there will be fewer surprises on Sunday night. So will people take a pass on the commercials and actually use that time for a bathroom break?

Seethu Seetharaman, a marketing professor at Washington University, doesn’t think so. He thinks the early releases will just whet people’s appetite and help build excitement leading up to the game. After all, some companies are only putting out teasers or trailers of their ads.

“There is the danger of newness being lost,” he acknowledged.

But one of the most memorable and buzzed-about commercials last year - the kid dressed up as Darth Vader in a Volkswagen ad - was released online in advance of the big game, he noted.

That gets closer to Seetharaman’s main point. He questions the wisdom of companies wasting - err, spending - $3.5 million on a 30-second spot at all when they could get free exposure through a viral, online campaign.

Craig Kaminer, president of the St. Louis-based marketing agency Twist, also emphasized the free part of releasing commercials early on YouTube.

“You can get millions of additional people to see it and it doesn’t cost you anything,” he said. “At the end of the day, advertisers are interested in one thing and that’s getting to the most number of people to spread their message.”

And while some people may have seen some of the commercials before Sunday night, up until then it will have mostly been an individual experience. But during the game, it will be a communal activity with your family and friends, he said.

That is something I can understand. For the first time in many years, I found myself glued to the television at a friend’s Super Bowl party last year. Actually, I alternated between the TV and my iPhone.

I gave myself whiplash as I devoured snarky tweets from my friends - and yes, from the random group of witty people I don’t know who I follow on Twitter - as they dished out their real-time commentary on the ads.

That’s something you can’t recapture the next day.

So I’ll be tuning in on Sunday - with my smartphone at my side.

SIN IS IN

This year is shaping up to be a pretty good year for sin.

At least, that’s what the research firm IBISWorld concludes in a recent report tracking industries that it has assigned to each of the seven deadly sins.

With more disposable income at our fingertips - and with the help of new technologies - IBISWorld said Americans will find more ways to indulge themselves in 2012. Apparently, this will be a bountiful year for envy, lust and sloth. Yippee! But growth will be a bit slower for those who peddle in pride and greed. Boo!

The firm does takes liberties with its labels. For example, I’m sure there are plenty of gun manufacturers out there who would object to being placed into the “wrath” category. But nonetheless, it makes for some colorful reading.

So here’s a quick snapshot:

• Envy: Jewelry store sales are projected to grow 4.5 percent this year.

• Lust: Online dating sales are expected to increase 3.5 percent.

• Sloth: The “do-it-for-me” market of maids, nannies, personal chefs, gardeners and butlers is expected to grow 3.4 percent.

• Gluttony: Fast-food restaurants are expected to grow 2.6 percent.

• Wrath: Gun and ammunition manufacturers are projected to be up 2.3 percent.

• Pride: Tanning salon sales are expected to increase 2 percent.

• Greed: Commercial banking is expected to be up 1.9 percent.

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LONDON

Asian stock markets were mixed early Thursday, following flat trading on Wall Street as renewed worries over Europe’s banking system and a strong yen weighed on investor sentiment.

Japan’s Nikkei 225 index fell 0.5 percent to 8,514.03, while South Korea’s Kospi index gained 0.2 percent to 1,870.96. Hong Kong’s Hang Seng Index rose 0.3 percent to 18,787.21. Australia’s S&P ASX 200 fell 1.2 percent at 4,139.70.

Benchmarks in Singapore and Taiwan were higher while those in Malaysia and New Zealand were lower.

In Tokyo, the yen’s rise against the euro elicited fears of more pain ahead for Japanese exporters. The euro sank to 98.71 yen on Monday in European trading, which Japan’s Kyodo News said was an 11-year low. The euro remained under selling pressure as it hovered around 99.72 yen Thursday.

On Wednesday, European markets declined after another increase in Italy’s borrowing costs renewed worries about the continent’s efforts to restore confidence in its debt-hobbled governments. Additionally, UniCredit _ Italy’s biggest bank _ said it would offer stock at a 69 percent discount to raise cash guaranteed unsecured personal loan. The size of the discount escalated worries about the state of Europe’s banking sector.

Stocks barely budged in the U.S. The Dow Jones industrial average edged up 0.2 percent to close at 12,418.42. The Dow opened the year Tuesday with a 180-point gain that brought it to its highest level since July.

The Standard & Poor’s 500 index inched up less than 0.1 percent to close at 1,277.30. The Nasdaq fell marginally to 2,648.36.

Benchmark oil for February delivery fell 35 cents to $102.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 26 cents to end at $103.22 per barrel on the Nymex on Wednesday.

In currencies, the euro fell to $1.2930 from $1.2938 late Wednesday in New York. The dollar slipped to 76.72 yen from 76.75 yen.

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Retail sales look poised for a solid finish to the holiday season as consumers hit stores and went online to snap up last-minute gifts, according to data released on Wednesday.

Still, overall sales growth lagged the increase in online spending and some brick-and-mortar retailers struggled. Steep discounts were prevalent throughout the season, tactics that drove sales but could crimp profitability at some chains.

The International Council of Shopping Centers/Goldman Sachs weekly chain store sales index rose 4.5 percent during the week ending December 24, versus a holiday-shortened pre-Christmas Day week in 2010. Redbook Research put the year-over-year gain at 4.3 percent.

Adjusted for the calendar mismatch, the ICSC/Goldman index rose 0.9 percent for the week ending December 24, compared with the prior week.

“The finish is solid and the season itself was good,” said ICSC Chief Economist Michael Niemira. “November was on the soft side but December will be better.”

ICSC is sticking with its holiday sales growth forecast of 3.5 percent, which it issued in September.

“Major players, such as Macy’s (M.N: Quote, Profile, Research, Stock Buzz), are fine,” Niemira added. “Specialty stores are likely to be more uneven. Specialty apparel seems to have been hit by abnormally warm weather. Sales were on the slow side and there has been more discounting consequently.”

The biggest shopping malls and regional malls saw the strongest customer traffic since the first week of 2011. Factory outlets remained busy, but less so than the prior week, he said.

Consumers ratcheted down their online spending compared with

earlier in December, but visits to and spending at electronics and department stores increased during the week, Niemira noted.

U.S. consumer confidence rose more than expected in December, hitting an eight-month high, as Americans grew more upbeat about the labor market and their financial situation, the Conference Board said on Tuesday. That followed a report early in December showing U.S. unemployment at the lowest level since March 2009.

However, U.S. house prices are still falling, tempering economic optimism, and some retailers are suffering.

Sears Holdings Corp (SHLD.O: Quote, Profile, Research, Stock Buzz) said on Tuesday that it will shut as many as 120 stores after poor sales. Borders Group (BGPIQ.PK: Quote, Profile, Research, Stock Buzz) and Filene’s Basement were among retailers that filed for bankruptcy protection from creditors this year, and shut down, with Filene’s stores set to close shortly.

Part of the problem may be competition with online retailers, who saw faster sales growth this holiday season, suggesting e-commerce took market share from brick-and-mortar stores.

Online spending in the United States reached a record $35.27 billion from November 1 through December 26, up 15 percent versus the corresponding period last year, comScore (SCOR.O: Quote, Profile, Research, Stock Buzz) reported.

For the week ending December 25, consumers spent $2.83 billion online, up 16 percent from the corresponding period in 2010, comScore also said.

“E-commerce is going to be awesome this holiday and retail will be mediocre,” said Michael Rubin, head of Kynetic, which owns online retail businesses Fanatics, Rue La La and ShopRunner.

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We want gift cards and like to give them, but for some reason we don’t always use them and wind up wasting billions of dollars.

A recent poll by Consumer Reports, for instance, found that one-quarter of people who received a card as a holiday gift last year still haven’t used it, and more than half of those had two or more unredeemed cards.

We have lots of excuses. We forgot about the card or lost it. The store didn’t have any merchandise we wanted. Or the retailer isn’t nearby, or we don’t like the store.

This has spawned an online secondary market where gift card exchange sites, such as PlasticJungle.com, Cardpool.com, MonsterGiftCard.com and GiftCardRescue.com, help consumers buy and sell unwanted retail gift cards at a discount. Sellers can get around 70 percent to 90 percent of the value of their cards. The more popular the retailer, the higher the price.

“It at least gives consumers the option to get something for an unused gift card,” said Tod Marks, senior editor at Consumer Reports. “It’s like life support for unwanted gift cards.”

Of course, one way to avoid unwanted or forgotten cards is by giving cash or checks instead. It’s unlikely that someone will fail to spend money that’s in their wallet or deposited in the bank. Another benefit: Shoppers tend to spend more at a store than the amount on the gift card. Not so with cash.

But card experts and consumer advocates cringe at my suggestion of cash, saying bills are “gauche.” At least a gift card to a favorite retailer, they say, makes it seem as if you gave some thought to what the recipient would want.

And besides, some say, people want gift cards. They are the No. 1 requested gift this season and are at the top of most shopping lists, according to the National Retail Federation.

Gift card sales are expected to reach a record $100 billion this year, up nearly 10 percent from the year before, according to TowerGroup, a research and advisory firm. About $2 billion of that, though, will be lost through fees and expired, stolen or misplaced cards.

The losses were much worse before federal protections kicked in last year that, among other things, prevent cards from expiring within the first five years.

Still, $2 billion is a lot of money to leave on the table. And if we don’t use it, somebody else will.

Some retailers recognize unredeemed cards as income after a long period of inactivity. Starbucks Corp., for example, reported $46.9 million in income from unredeemed cards for the year ended in October.

And more than a dozen states now recover funds on unredeemed cards, similar to other unclaimed property, said Brian Riley, senior research director at TowerGroup.

So if you are going to give a gift card, make sure it’s from a retailer that the recipient patronizes. Or if you’re not sure, consider a general-purpose gift card that can be used at any store, although you’ll pay a fee to buy the card. American Express, for instance, offers such cards for a $3.95 fee.

And if you’re stuck after the holidays with cards you don’t want, here’s some advice for getting rid of them:

DON’T SPEND, INVEST • The most innovative use of unwanted gift cards this season goes to GoalMine, which caters to small investors by helping them set goals and begin investing for as little as $25.

Between Dec. 19 and the end of January, GoalMine is accepting unwanted gift cards with values of $25 and up that will be sold at PlasticJungle.com, a card exchange site. Consumers decide whether to deposit the proceeds in an FDIC-insured savings account or in a stock or bond mutual fund.

As a further incentive, GoalMine promises to redeem the first card for 150 percent of its value. The card can’t be worth more than $50.

GoalMine’s general manager, Rimmy Malhorta, said the company figured there were a lot of unredeemed cards that could be put to good use. “Wouldn’t it be great instead of letting Starbucks have that money or iTunes or whoever,” he said, “you could make that money for you and put it toward your kid’s college education, your family home or a rainy day fund?”

GIFT CARD EXCHANGES • These middleman websites for consumers wanting to buy, sell or swap cards have been growing. PlasticJungle, one of the major players, bought and sold cards worth about $18 million last year, three times the amount of the year before, said Chief Executive Bruce Bower. “We are having similar growth right now,” he added.

Sites deal in gift cards from hundreds of national retailers, so you likely won’t be able to sell a gift card from a local shop. Cards usually must have a value of $20 or $25 still on them.

Sellers send their cards to the exchange, which verifies the value. They can get as much as 92 percent of the value of the card, but that’s for the hottest retailers.

Buyers can pick up cards at a discount of up to 35 percent, although the saving is much less on popular cards.

Some sites offer a money-back guarantee if a card’s value turns out to be less than promised. That’s a big advantage over trying to sell a card on your own through Craigslist.

If you’re going to buy or sell on one of the exchange sites, check out more than one. CardHub.com has a gift card exchange feature that aggregates card deals from various sites.

Consumer Reports’ Marks, who researched gift card exchanges earlier this year, says no single site gave the best deal every time.

“The sites often had a different idea of the worth of the same card,” he added. The gap between the best and worst offers for a popular Whole Foods card, Marks said, was 22 percent.

Before buying or selling, read the terms, which also can vary among the sites. And buyers should make sure the site guarantees the cards it sells.

Also, buyers should beware of cards with a value that’s an odd number — say, $63.45 — which could signal that the card was given to a customer as a refund on a purchase, said TowerGroup’s Riley. Refund cards, he said, don’t have the same legal protections as gift cards.

If in doubt, he said, ask the site whether the card is from a refund.

Many of the gift card complaints to Maryland’s attorney general deal with the merchant going out of business. When that happens, card owners generally stand in line with all the other creditors and may get little or nothing. Try to avoid this by buying cards from healthy retailers.

You also can set up an account with ScripSmart.com, which sends out email alerts if a retailer appears headed for bankruptcy. ScripSmart also offers a “nag me” alert to remind you to use your gift card.

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Local entrepreneurs didn’t let a little thing like the toughest economic recovery since World War II stand in the way of starting new businesses.

Despite the uncertainty in the economy, the owners of restaurants, coffee shops, and service firms that opened here over the past few years found myriad ways to finance their dreams.

They’ve had to be creative though, as banks pulled back on lending after real estate loan defaults led to losses on many banks’ balance sheets. Loans of less than $1 million from locally chartered banks, which primarily went to small businesses, fell each quarter in 2010 and so far this year. And only a very slim margin of those loans went to startups, according to Julie Stackhouse, senior vice president of the Federal Reserve Bank of St. Louis.

“Small, entrepreneurial businesses have always faced a challenge of finding credit because they .

Singapore Airlines is hoping travelers will “Scoot” to its new long-haul budget carrier as one of the world’s leading airline brands seeks to muscle in on Asia’s burgeoning no-frills market.

Scoot, as the new carrier is known, will begin service by June 2012 with four Boeing 777-200 jets flying by the end of that year, chief executive Campbell Wilson told reporters Tuesday.

Scoot plans to initially focus on destinations that are five to 10 hours from its base at Singapore’s Changi International Airport and fly to four or more cities in Australia and China.

“This new market segment is growing fast,” Wilson said. “We aim to bring new business to the SIA group.”

Singapore Airlines, which is also known as SIA, has long relied on its top-rated in-flight service _ epitomized by the iconic Singapore Girl cabin crew _ to lead the long-haul first and business class market, especially in popular Asia to Europe routes.

However, Gulf carriers such as Emirates and Etihad and Asian rivals such as Hong Kong’s Cathay Pacific and Australia’s Qantas have eaten away at SIA’s market share in recent years, pushing the Singaporeans to eye the growing low-cost market.

Scoot will face two main competitors in the region’s long-haul budget market _ Air Asia X, owned by Malaysia’s AirAsia, and JetStar, a unit of Qantas. Analysts expect Scoot will likely seek to provide more frills at a slightly higher price that its rivals.

“This new airline is a poor man’s excuse to fly SIA,” said Shukor Yusof, an aviation analyst with Standard and Poor’s in Singapore. “It will be like luxury budget. When you’re flying 12 to 13 hours, you need to throw in some of the facilities people are used to on intercontinental flights.”

Wilson said Scoot will offer two classes of cabin, with economy tickets up to 40 percent less than full-service carriers. Customers will be able to choose seats, meals and baggage options, he said.

“We’ll offer many other options so people can customize their experience,” Wilson said.

The airline plans to eventually buy several Boeing 777-200ER planes, which can travel up to 13 hours, allowing Scoot to fly to Europe and Africa, he said. Scoot also plans next year to hire about 52 pilots, 250 flight attendants and 40 ground staff with what Wilson called “Scootitude.”

Scoot is a wholly owned subsidiary of Singapore Airlines, which invested 283 million Singapore dollars ($227 million) to start the long-haul carrier. SIA already owns SilkAir, which targets popular Asian holiday destinations, and has a one-third stake in Tiger Airways, a short-haul budget carrier.

Growing demand for budget flights has been a bright spot for the airline industry this year as slowing global economic growth and higher fuel costs hurt earnings. The International Air Transport Association forecasts global airline profits will drop to $6.9 billion this year and $4.9 billion in 2012 from $15.8 billion last year.

Asian airline stocks have also taken a hit, with most carriers, including Singapore Airlines, down at least 20 percent this year. Only AirAsia has bucked the trend, jumping 50 percent so far in 2011.

Some analysts expect travel demand in Asia to improve next year. Airline analyst Mark Webb at HSBC forecasts Asian passenger numbers will rise 7 percent this year and 9 percent next year. He upgraded his rating on Singapore Airlines shares to “neutral” from “underweight” last month.

Scoot hopes to ride the low-cost wave that has made budget flights about 25 percent of Changi’s traffic this year from almost nothing a decade ago. The best earners among Asian airlines this year have been short-haul budget carriers Indonesia’s Lion Air, AirAsia and Cebu Air in the Philippines, S&P’s Yusof said.

“Budget airlines are not a fad. They’re here to stay,” Yusof said. “The market certainly has shifted from legacy carriers to discount carriers.”

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Encouraging news from Europe helped ignite stock prices in October. This week, investors will shift their focus to U.S. economic data, which might temper their exuberance.

Three events this week will command attention: the U.S. jobs report for October, the Federal Reserve’s policy meeting and Fed Chairman Ben Bernanke’s quarterly news conference.

A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing. Yet the news may have also raised unrealistic expectations about the economy. Investors could end up disappointed.

“There’s a big difference between avoiding recession and stronger growth,” said Eric Green, chief U.S. economist at TD Securities. “The economic data will be OK, but it’s not going to be a catalyst to move stocks up” significantly.

Last week, investors were cheered by the deal European leaders reached Thursday. European banks agreed to take a 50 percent loss on their holdings of Greek government bonds. They will also set aside more money to cushion against future losses.

Leaders also pledged to expand the European Union’s bailout fund.

The announcement catapulted U.S. stocks. The Dow Jones industrial average rocketed 339 points Thursday and appears headed for its sharpest monthly gain since 1987.

Economists caution that European officials must still fill in the details of their plan and implement it. Even then, it might not work. When world leaders meet in France on Thursday and Friday, investors will want to see signs that China and other nations are prepared to help bolster Europe’s bailout fund.

For all that, some stock analysts remain bullish.

“The market was priced for meltdown, and didn’t get it,” Green said. “However inadequate the European package may appear, it is a decisive step in the right direction.”

Stocks had plummeted in September over fears that Europe’s debt burdens would trigger a financial catastrophe. With those fears fading, U.S. stock prices looked cheap last week, analysts said.

The U.S. economy appears more resilient than it did in August, when worries had grown that the United States would fall back into recession. Consumers’ sentiment tumbled that month after Congress fought over raising the nation’s borrowing limit and Standard & Poor’s downgraded long-term U.S. debt.

Yet the economy managed to expand in the July-September quarter at the healthiest pace in a year. Despite their gloomy outlook, consumers spent more. Companies increased their investment in software and equipment.

The focus on Europe “taught us something very important,” said David Kelly, chief market strategist at J.P. Morgan Fund. “Despite all the turmoil in Europe and the drop in confidence caused by it, the U.S. economy is still growing.”

All that makes the Fed less likely to announce any new steps Wednesday at the end of its two-day policy meeting no fax cash loans. Several members of the policy committee have suggested more action may be needed to try to help the economy _ perhaps another round of bond purchases to further cut long-term interest rates. But few analysts expect any such announcement yet.

Three of the 10 members of the policymaking committee have dissented from the Fed’s smaller-scale efforts to boost growth in recent months. Two of the three are scheduled to lose their voting privileges in 2012.

Investors might welcome a quiet Fed meeting, analysts said. It would suggest that the economy might be able to recover on its own.

“Every time the Fed administers medicine to the economy, it convinces people that the economy is sick,” Kelly said. “There would be incredible cheering if the Fed decided that the economy is on the mend and no further action is required.”

Also Wednesday, the central bank will update its economic forecasts, which Bernanke will discuss at his news conference. The Fed is expected to revise down its estimates for hiring and growth from its last forecast in June. Investors will scrutinize how Bernanke explains any such revisions.

The Fed’s meeting will be followed by the most closely watched economic indicator the government releases: the monthly jobs report.

The economy is growing, but not enough to generate many jobs for the 14 million people unemployed. Employers added 103,000 net jobs in September. That wasn’t enough to lower the unemployment rate, which has been stuck 9.1 percent for three months.

Analysts expect roughly 100,000 jobs to be added in October. Anything less could raise concerns that the economy may slow. Stocks might stumble.

A gain of 100,000 jobs is scarcely enough to keep up with population growth. More than double that total would be needed consistently to reduce unemployment significantly.

“The jobs report will be a sobering reminder … that all is not well with the economy,” said Dan Greenhaus, chief global strategist at brokerage firm BTIG.

This week will bring other economic reports, too. The Institute for Supply Management, a trade group of purchasing executives, will issue its surveys of purchasing managers for manufacturing and service-sector companies. Those will provide early reads of whether growth will accelerate in the final three months of the year or drop back.

And automakers will report their October sales, a gauge of whether consumers are willing to make big purchases. Consumer sentiment has fallen to recession levels. But that doesn’t necessarily mean shoppers will reduce their spending.

The auto sales data, in particular, will show “what the consumer does, not what the consumer says,” said Jerry Webman, chief economist at OppenheimerFunds.

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Rupert Murdoch’s News International promised to pay all of News of the World editor Andy Coulson’s legal fees only a month after he resigned from the paper in disgrace, according to a court document obtained by The Associated Press on Tuesday.

The former editor, who later served as communications director for Prime Minister David Cameron, is a central figure in the phone hacking scandal that has convulsed the British media. He’s been arrested on suspicion of abetting a culture of illegal spying while at the top of the News of the World, an allegation he’s fighting with the help of the high-powered international law firm DLA Piper.

Such an open-ended promise to foot Coulson’s legal bill would have been highly unusual, according to Jo Keddy, an employment partner with the London law firm Winckworth Sherwood. She called it the equivalent of “writing a blank check for a former employee.”

The generous deals struck by News International with its victims and former staff members have emerged as a key issue for lawmakers investigating the scandal, with some suggesting that the company had tried to buy the silence of those involved to help bury the scandal, which first erupted more than five years ago.

The exact nature of the promises made to Coulson are under dispute.

According a nine-page lawsuit filed by Coulson in the court’s Queen’s Bench Division, News International subsidiary News Group Newspapers has recently refused to pay expenses incurred by Coulson’s criminal defense team, telling him that allegations of phone hacking fell “outside the scope of your contract of employment.”

Coulson’s lawyers reject the assertion, saying that News Group had made a blanket deal to pay any legal fees stemming from his time at the News of the World.

The complaint says News International struck the deal with Coulson in February 2007, a month after his royal editor, Clive Goodman, was jailed for hacking into the phones of members of the royal household. While Coulson denied knowing anything about the practice, he said he was resigning out of a sense of responsibility for what happened.

Goodman’s sentence was meant to draw a line under the scandal, but Coulson’s deal appeared to suggest that both parties feared trouble down the line.

The lawsuit says that News International promised to repay Coulson for “any professional (including without limitation, legal and accounting) costs and expenses … which arise from his having to defend, or appear in, any administrative, regulatory, judicial or quasi-judicial proceeding as a result of his having been the editor of the News of the World.”

The suit goes says that “it was anticipated” that Coulson would be drawn into the criminal investigation into phone hacking which was relaunched early this year.

News International declined to comment on the suit. DLA Piper, Coulson’s law firm, did not immediately return an email seeking further comment on Coulson’s complaint.

Coulson was arrested over the phone hacking allegation on July 8 _ making him one of more than a dozen former News of the World employees who’ve been arrested since the beginning of the year. The scandal has led to the closure of the 168-year-old paper and the resignation of several top Murdoch executives.

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