Nasdaq posts biggest January gain since 2001
U.S. labor cost growth slows in fourth quarter
Exxon, UPS rise after results, Caterpillar slumps
Fed decision on interest rates on Wednesday
Indexes up Dow 1.09, SP 500 1.46, Nasdaq 1.67

NEW YORK, Jan 31 Reuters Major U.S. stock indexes closed over 1 higher on Tuesday as labor cost data encouraged investors about the Federal Reserve39;s aggressive approach to taming inflation a day ahead of the central bank39;s critical policy decision.

Investors also digested a full plate of earnings reports. Shares of Exxon Mobil Corp and United Parcel Service Inc rose following their respective results, while Caterpillar Inc and McDonald39;s Corp ended weaker after their results.

The SP 500 tallied its first January increase since 2019, gaining 6.2, while the techheavy Nasdaq jumped 10.7 for the month its biggest January percentage rise since 2001.

U.S. labor costs increased at their slowest pace in a year in the fourth quarter as wage growth slowed, Labor Department data showed. The U.S. central bank on Wednesday is expected to hike the Fed funds rate by 25 basis points, following a 2022 in which the Fed aggressively boosted rates to control soaring inflation.

The labor cost data is indicating that maybe what the Fed has done is working and … were rounding the corner on interest rate hikes, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

The Dow Jones Industrial Average rose 368.95 points,…