U.S. stocks rise, bonds fall as investors await Fed minutes

By Lewis Krauskopf

NEW YORK (Reuters) - U.S. stocks rose and Treasury prices fell on Wednesday as investors awaited minutes for the U.S. Federal Reserve's latest meeting amid expectations of an impending rate hike.

The major European stock index fell, after a strong rally on Tuesday, as security issues remained a focus for investors.

A woman suicide bomber blew herself up and another militant died when police raided an apartment in a Paris suburb seeking suspects in last week's attacks in the French capital that killed 129 people.

"All eyes are on the Fed, while geopolitical concerns remains on the minds of the investors," said Peter Cardillo, chief market economist at First Standard Financial in New York.

 

The Dow Jones industrial average <.DJI> rose 102.78 points, or 0.59 percent, to 17,592.28, the S&P 500 <.SPX> gained 11.52 points, or 0.56 percent, to 2,061.96 and the Nasdaq Composite <.IXIC> added 31.71 points, or 0.64 percent, to 5,017.72.

The pan-European FTSEurofirst 300 index <.FTEU3>, which had risen 2.6 percent on Tuesday, fell 0.3 percent, with industrial gas company Air Liquide off sharply after announcing an expensive-looking acquisition. The French CAC 40 index <.FCHI> fell 0.7 percent.

An index of major global markets rose 0.2 percent.

"The indices are treading water today ... there seems to be a little bit of trepidation at the moment because of what's been going on in Paris this morning and overnight," said Augustin Eden, research analyst at Accendo Markets.

The U.S. dollar <.DXY> edged up 0.1 percent against a basket of currencies after hitting a seven-month high on Tuesday, while the euro > rose 0.05 percent against the greenback. The dollar index has risen more than 6 percent in the past month.

Due at 2:00 p.m. ET (1900 GMT), the minutes of the Fed's meeting are expected to give investors clues on the central bank's reading of the economy. Meanwhile, two Fed officials expressed confidence that they will be able to pull off a relatively smooth interest-rate hike when the time comes.

"It will be a case of range-trading going into the Fed minutes. We could see some positions being pared, with the dollar having risen in the past few weeks," said Jeremy Stretch, head of currency strategy at CIBC World Markets.

U.S. housing starts in October fell to a seven-month low as single-family home construction in the South tumbled, but a surge in building permits suggested the housing market remained on solid ground.

Benchmark 10-year Treasuries notes > were down 8/32 in price for a yield of 2.2887 percent.

German Bunds > yields slipped 1.5 basis points to 0.517 percent.

"There is a bit of a safety bid for core bonds from the nervous energy around events in Paris," said Matthew Cairns, fixed income strategist at Rabobank.

Oil prices rebounded on reports of falling stockpiles and rising U.S. refinery activity, after declines a day earlier.

Brent crude futures were up 0.6 percent at $43.84 per barrel. U.S. crude futures were up 0.4 percent at $40.83 a barrel. U.S. data showed a smaller than forecast build in crude inventories.

Zinc, lead and nickel fell, to around their lowest points in five to seven years, as fears persisted over waning demand in top metals user China.

Spot gold > slipped 0.1 percent, trading around 2010 lows.

(Reporting by Lewis Krauskopf, additional reporting by Abhiram Nandakumar in Bengaluru, Sudip Kar-Gupta, Marius Zaharia and Dhara Ranasinghe in London; editing by John Stonestreet and Nick Zieminski)