Wall Street rises ahead of Fed interest rate decision
By Amy Caren Daniel (Reuters) - U.S. stocks climbed 0.7 percent on Wednesday, boosted by the technology sector, while banks rose ahead of a much anticipated Federal Reserve announcement that investors hope will point to a more moderate pace of interest rate hikes next year, which could spark a year-end rally
By Amy Caren Daniel
(Reuters) - U.S. stocks climbed 0.7 percent on Wednesday, boosted by the technology sector, while banks rose ahead of a much anticipated Federal Reserve announcement that investors hope will point to a more moderate pace of interest rate hikes next year, which could spark a year-end rally.
The central bank is widely expected to raise rates for the fourth time this year when its two-day policy meeting ends at 2 p.m. ET (1900 GMT), but the focus will be on whether it will still hint at three hikes next year as it did in September.
Fed funds futures are pricing in only one more rate rise next year. The latest Reuters poll showed economists expect two rate hikes, with the probability of a U.S. recession in the next two years jumping to 40 percent.
The S&P financials index — the worst performing among the 11 S&P sectors this month — rose 1.17 percent, with rate-sensitive banks gaining 1.05 percent.
The technology sector, down for the fourth month in a row after leading a rally earlier in the year, rose 0.6 percent and gave the biggest boost to the markets.
All 11 sectors were higher. Energy stocks led with a 1.63 percent jump as oil prices steadied, while the smallest gains were in the defensive utilities, real estate and consumer staples indexes.
"I think investors are positioning themselves for a year-end rally, because in the short term markets are over-sold," said Matt Watson, portfolio manager with James Advantage Funds in Alpha, Ohio.
"Everyone is hoping that their (Fed's) press conference and their statement is dovish, which means that we will see fewer rate hikes next year than we did this year."
A rough couple of months have pushed all three major indexes more than 10 percent below recent highs, into what is known as correction territory, and that has sparked calls, including from President Donald Trump, for the Fed to hold fire.
At 11:14 a.m. ET, the Dow Jones Industrial Average was up 169.60 points, or 0.72 percent, at 23,845.24, the S&P 500 was up 18.32 points, or 0.72 percent, at 2,564.48 and the Nasdaq Composite was up 41.07 points, or 0.61 percent, at 6,824.98.
Microsoft Corp's 1.4 percent gain gave the biggest boost to the S&P 500 and the Nasdaq. The biggest drag on the two indexes was Facebook Inc's 1.8 percent slide.
That came after the New York Times reported Facebook allowed some companies far greater access to data than it had disclosed, although the social media company said the access was only after user permission.
FedEx Corp, seen as a bellwether for the U.S. economy, sank 10 percent, on course for its biggest one-day drop in 10 years, after slashing its 2019 forecast blaming an economic slowdown.
Micron Technology Inc fell 4.1 percent after giving a tepid forecast that exacerbated fears that the chip boom was fizzling out.
Advancing issues outnumbered decliners for a 2.16-to-1 ratio on the NYSE and a 1.66-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 26 new lows, while the Nasdaq recorded three new highs and 242 new lows.
(Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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