Energy and health-care sector stocks lead broad-based gains
US stocks ended higher on Tuesday, 16 September 2014 at Wall Street sending the Dow Jones Industrial Average to an intraday record high, while the S&P 500 recorded its biggest one-day gain in 4 weeks. Afternoon gains on Wall Street were driven by a rally in energy companies. Investors also grew optimistic about the Fed keeping the interest rates low for a while after a report by the Wall Street Journal.
The Dow Jones Industrial Average rose 100.83 points, or 0.6%, to 17,131.97. The Nasdaq Composite added 33.86 points, or 0.8%, to 4,552.76. The S&P 500 rallied 14.85 points, or 0.8%, to 1,998.98.
All ten sectors finished in the green as energy and health-care sector stocks led broad-based gains.
At Wall Street, equity indices hovered near their flat lines during the first two hours of action, but surged in reaction to reports from the Wall Street Journal concerning tomorrow's FOMC statement. Specifically, Fed watcher Jon Hilsenrath indicated that the statement will once again reflect the Fed's intentions to keep the fed funds rate at the zero bound for a considerable time after quantitative easing is wound down. The report sent the market higher since it contrasted with recent speculation that the Fed would drop the 'considerable time' language from its guidance, thus implying a swifter rate hike.
The FOMC is scheduled to release its post-meeting communique and economic projections at 2 p.m. EDT on Wednesday, 17 September, and Chair Janet Yellen is to conduct a press conference half an hour later.
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Among major stocks under focus, Humana shares rallied 3.2% after the health insurance company unveiled a $2 billion buyback program that will replace its current share repurchase program. Tesla Motors rose 2.8% recouping some of the sharp losses Monday when a Morgan Stanley argued that the electric-car maker's stock is overvalued. Shares of Apple were down as much as 2.0% at the start, but narrowed their loss to 0.8% by the end of the day.
Treasuries spent the day in a steady retreat from their early morning highs. The 10-yr note ended flat with its yield at 2.59%.
Bullion prices registered marginal gains at Comex on Tuesday, 16 September 2014 at Comex. U.S. gold futures rose modestly for the second day in a row on Tuesday, as investors placed their bullish bets with the Federal Reserve's two-day meeting underway.
Gold for December delivery rose $1.60 to $1,236.70 an ounce. A day earlier, gold broke a five-day losing streak to nail down a decent gain. December silver edged up a penny to $18.66 an ounce.
Crude-oil futures rose on Tuesday, 16 September 2014 at Nymex to their highest in nearly two months after the head of the Organization of the Petroleum Exporting Countries said the cartel could cut its output target for next year. News last week that OPEC and other oil organizations expected lower demand for oil in the next year took oil futures to multi-month lows.
Light, sweet crude for October delivery rallied $1.96, or 2.1%, to settle at $94.88 a barrel on the New York Mercantile Exchange.
Earlier Tuesday, OPEC Secretary General Abdalla el-Badri said he expects OPEC to lower its output target for 2015 by 500,000 barrels to 29.5 million barrels a day at the organization's November meeting in Vienna.
Participation was ahead of recent averages with more than 630 million shares changing hands at the NYSE.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, while August CPI (Briefing.com consensus 0.0%) and Q2 Current Account (expected deficit of $114.50 billion) will be reported at 8:30 ET. The NAHB Housing Market Index for September (consensus 56) will be released at 10:00 ET, while the latest policy statement from the FOMC will cross the wires at 14:00 ET.
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