US stocks rose yesterday lifting smaller company measures back to record levels in quiet trading before today's Federal Reserve meeting on inflation and interest rates.

The Dow Jones industrial average rose 69.25 points to 7,991.43, down slightly from a 73-point gain that put it within five points of the 8,000 mark.

The barometer of 30 blue-chip companies started the day with a 28-point deficit before quickly turning higher.

Broader stock indicators also shrugged off some early weakness to post some sizeable gains. Smaller-company shares ended a three-session pause in their record-setting march.

There was little reaction to a morning report showing that consumer spending rose a modest 0.3 per cent in August - down from a 1 per cent spurt in July - despite a healthy 0.6 per cent gain in personal income.

The report, which met most forecasts, was the last piece of major economic data before Fed officials meet today.