December 12, 2017
Tuesday, September 16, 2014

Wall Street climbs as expectations shift on Fed policy

US stocks rose today and the S&P notched its best performance in a month after a report shifted investor expectations for the Federal Reserve's policy statement due on Wednesday.

After a sluggish start to trading, major indexes rallied with participants citing a report in the Wall Street Journal as indicating the Fed could be less hawkish than markets have been expecting, as investors try to divine when the central bank will hike interest rates.

The Fed began its two-day policy meeting today, and while it has said it doesn't expect to raise rates until 2015, recent strong economic data has led Fed officials to acknowledge they may need to move sooner than they previously anticipated.

Each of the ten major S&P sectors finished in positive territory and the Dow managed to hit a new intraday record, although it closed about 6 points shy of a closing record.

Healthcare, up 1.3 percent and energy, up 1.2 percent, paced the advance. Energy shares moved higher as crude oil prices climbed, while utilities, up 1.2 percent, a proxy for investor appetite for dividend payers, also rose.

The Dow Jones industrial average gained 100.83 points, or 0.59 percent, to 17,131.97, the S&P 500 rose 14.85 points, or 0.75 percent, to 1,998.98 and the Nasdaq Composite added 33.86 points, or 0.75 percent, to 4,552.76.

The largest percentage gainer on the New York Stock Exchange was Glimcher Realty Trust, which jumped 29.8 percent after Washington Prime announced the purchase of Glimcher for $4.3 billion. The largest percentage decliner was Atlantic Power, which slumped 32.5 percent after the struggling utility removed its chief executive and decided against selling itself.

European stocks fell, with a regional index hitting a two-week low, as this week's referendum on independence in Scotland and the Federal Reserve's policy meeting kept investors on edge.

France's CAC 40 lost 0.4 percent, retreating before a confidence vote in the French parliament later on Tuesday. The government finally conceded last week that near-zero growth would prevent it from bringing its public deficit below three percent of output next year.

The worries surrounding France, Scotland and the outlook for the Fed's rates overshadowed brisk mergers and acquisition activity in Europe in the past few days.

Bucking the negative trend on Tuesday, Jazztel rose 6.1 percent on the day after a 13 percent rally on Monday. France's Orange has announced a deal to buy the Spanish fixed-line telecommunications operator.

The FTSEurofirst 300 index of top European shares ended 0.2 percent lower at 1,379.12 points, after slipping to a two-week low earlier in the session.

Meanwhile, Japanese stocks broke a five-day winning streak today as most investors stayed on the sidelines ahead of this week's outcome of the Federal Reserve meeting, though SoftBank jumped on news of strong demand for Alibaba's initial public offering in the United States.

The Nikkei share average dropped 0.2 percent to 15,911.53. SoftBank Corp soared 3.5 percent and contributed hefty 34.28 points to the Nikkei after Alibaba Group Holding Ltd IPO-BABA.N raised the price range on its initial public offering to $66 to $68 on Monday because of hefty investor demand.

SoftBank owns more than a 30 percent stake in Alibaba.

The Fed's Open Market Committee two-day policy meeting begins later in the day, and global markets are keenly awaiting clues on the timing of the first US rate hike in more than eight years.

The broader Topix dropped 0.2 percent to 1,310.86, and the JPX-Nikkei Index 400 slid 0.3 percent to 11,872.99.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  

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