U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level in more than a month, as the Federal Reserve begins a two-day meeting to decide whether more monetary stimulus is needed to boost the economy.

Equities rose on expectations that the Fed will extend its so-called Operation Twist. The $400 billion program, which ends this month, involves selling short-maturity debt and buying longer-term bonds. The central bank may expand its balance sheet, extend Operation Twist and/or lengthen its short-term interest rate guidance beyond late 2014, Goldman Sachs Group Inc. chief economist Jan Hatzius wrote today.

S&P 500 1,358.79 +14.01 +1.04%, NASDAQ 2,929.34 +34.01 +1.17%, Dow 12,861.85 +120.03 +0.94%.

Bank of America Corp. jumped 4.9 percent as the Federal Housing Finance Agency plans to help banks avoid being forced to buy back mortgages as it becomes concerned lenders are tightening standards even for the most creditworthy home buyers.

FedEx Corp., operator of the largest cargo airline, climbed 3.4 percent as executives pledged to improve service and efficiency as slowing economic growth pressures profits.

Microsoft Corp. advanced 3.6 percent after unveiling a tablet computer.