Stocks ticked higher on Monday on speculation the Federal Reserve would add liquidity in a move to strengthen the economy just days after a weaker-than-expected jobs report, the latest to suggest the recovery was losing momentum.

Gains in the Dow were limited, though, as Hewlett-Packard shares tumbled following the chief executive's resignation.

The Fed, while widely expected to renew its vow to keep interest rates near zero for an extended period, may indicate it is prepared to print more money to boost the economy as signs point to a slowing recovery. The bank is expected to release its statement at 2:15 p.m. EDT on Tuesday.

The central bank's options include reinvesting maturing or prepaying mortgage-back securities in its portfolio, which would hold its balance sheet steady rather than let it shrink.

It could also say it will stop paying interest on banks' excess reserves at the Fed to lower long-term rates and encourage lending.

Given the rally we had on Friday, after the weak jobs report, it seems the markets are expecting something more from the Fed than just a zero rate policy, said Paul Nolte, managing director at Dearborn Partners in Chicago.

There could be some disappointment if there isn't more.

Hewlett-Packard was the biggest drag on the Dow, falling 7.4 percent to $42.88 after CEO Mark Hurd resigned late on Friday. His resignation followed an investigation into sexual harassment charges brought by a female contractor sent the company's shares down 10 percent in extended trade on Friday.

The Dow Jones industrial average <.DJI> was up 38.38 points, or 0.36 percent, at 10,691.94. The Standard & Poor's 500 Index <.SPX> was up 4.92 points, or 0.44 percent, at 1,126.56. The Nasdaq Composite Index <.IXIC> was up 13.75 points, or 0.60 percent, at 2,302.22.

On the upside, McDonald's Corp hit a lifetime high at $73.33 after it reported July sales data that was stronger than expected, though the stock later pared gains to trade at $72.81, up 1.5 percent.

McDonald's sales could prove somewhat troubling in the future if consumers are still going for discounts rather than spending at higher-end places, Nolte said.

The Nasdaq got a boost from Research in Motion Ltd

, U.S.-listed shares of which rose 3.7 percent to $55.43. Earlier, a Saudi official said the BlackBerry maker and Saudi mobile firms were testing three servers to send communications and data through Saudi Arabia before Canada to address Riyadh's concerns over security.

Goldman Sachs cut its year-end target for the S&P 500 index to 1,200 from 1,250, reflecting a lower U.S. growth forecast.

The weak GDP growth forecast and specter of deflation means top-line sales increases will be hard to achieve, the firm wrote to clients.

(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)

Canada Mark Hurd