Energy rally boosts Wall Street despite global growth woes

NEW YORK (Reuters) - U.S. stocks rose in a volatile Tuesday session as energy shares rallied and investors bet the Federal Reserve will be cautious in removing support in the face of a more fragile global economy.

Futures had crumbled in early trading as the ruble neared 80 per U.S. dollar, down 21 percent for the session. The Russian currency sharply pared its losses and was down about 3 percent, near 68 per dollar.

Market participants cited bets on the Federal Reserve's next move as giving stocks support. Fed officials will decide this week whether to make a critical change to their policy statement that would widen the door for interest rate hikes next year. In October, The Fed repeated that benchmark rates were unlikely to rise for a "considerable time."

"Perhaps markets think the Fed will not be as on-schedule on taking out that language," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

She said the market is betting the Fed will give consideration to rapidly changing financial conditions. A Fed statement and news conference are expected on Wednesday.

At 12:08 p.m. EST (1708 GMT) the Dow Jones industrial average <.DJI> rose 156.37 points, or 0.91 percent, to 17,337.21, the S&P 500 <.SPX> gained 16.42 points, or 0.83 percent, to 2,006.05 and the Nasdaq Composite <.IXIC> added 19.09 points, or 0.41 percent, to 4,624.24.

Brent crude fell as much as 4.2 percent but was last down 1.2 percent at $60.36 a barrel. U.S. crude , which fell as much as 4.1 percent, was recently up 0.2 percent at $56.04 a barrel after gaining as much as 2.2 percent.

Energy sector stocks <.SPNY>, up 2.9 percent, were the largest gainers on the S&P 500.

"There were many, many stocks, especially in the energy sector that were just trading at absolutely ridiculous prices to their fair market valuation," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"That is really what started the rally, when investors really started to come into the energy stocks."

CVS Health Corp , up 4.8 percent to $94.14, led gains on the S&P 500 after a strong 2015 forecast. 3M lifted its dividend and was the top gainer on the Dow industrials with a 2.5 percent advance.

Boeing , up 2.6 percent at $125.20, was among the best performers on the day after it raised its dividend and perked up its buyback program.

(Editing by Chizu Nomiyama, Nick Zieminski and Meredith Mazzilli)

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