U.S. stocks were solidly higher in late-afternoon trading Wednesday as investors welcomed new hints that the Federal Reserve could begin to raise interest rates as early as next month. Minutes from the central bank’s last meeting of its policymakers show Fed officials believed that the economy could improve enough to justify a rate hike in December.
KEEPING SCORE: The Dow Jones industrial average rose 195 points, or 1.1 percent, to 17,684 as of 3:12 p.m. Eastern Time. The Standard & Poor’s 500 index gained 26 points, or 1.3 percent, to 2,076. The gain moved the S&P 500 back into positive territory for the year. The Nasdaq composite added 70 points, or 1.4 percent, to 5,056.
THE QUOTE: “The market today is just reinforcing the view that most likely the Fed is going to move in December, and that’s not necessarily a bad thing for either the economy” or the stock market, said Jeremy Zirin, chief equities strategist at UBS Wealth Management Americas.
FED WATCH: The minutes of the October meeting revealed that Fed officials believed the U.S. job market would improve further and that inflation would begin to move toward their 2 percent annual target by the time the Fed meets next month. They also took note of the U.S. economy’s resilience through a summer of financial market turbulence and felt that global threats had “diminished.” The Fed has kept its benchmark for short-term rates near zero since late 2008. Higher rates tend to weigh on stock markets, but investors have mostly become prepared for the Fed to act in December.
SECTOR VIEW: The 10 sectors in the S&P 500 rose, led by stocks in financial companies, which tend to benefit from rising interest rates. Among individual bank stocks, JPMorgan Chase gained $1.25, or 2 percent, to $67.38 and Bank of American climbed 41 cents, or 2.4 percent, to $17.82.
SPINOFF: ConAgra Foods climbed 4.2 percent after announcing that it would spin off its frozen potatoes business. The stock added $1.67 to $41.03.
BEING COURTED: Norfolk Southern rose 6.2 percent after receiving an unsolicited offer to be bought out by Canadian Pacific. The stock gained $5.43 to $92.40.
TASTY RESULTS: Jack in the Box climbed 5.9 percent after the burger chain gave an upbeat 2016 profit outlook. The stock added $4.11 to $74.10.
OFF TARGET: Target slumped 4.9 percent after the retailer reported that its sales at established locations increased in the third quarter at a slower rate than in the previous quarter. The stock shed $3.59 to $69.32.
CONFRONTING COSTS: Citrix Systems slid 9.8 percent on news that the computing company will slash about 1,000 jobs and spin off its GoTo business into a separate company as it seeks to cut costs. The stock fell $7.70 to $70.72.
CONSTRUCTION SLOWS: The Commerce Department’s latest tally of home construction showed that builders broke ground on fewer houses and apartments in October. A steep drop in apartment construction contributed to the 11 percent slide in housing starts. Single-family house construction declined 2.4 percent.
MARKETS OVERSEAS: Europe markets ended mixed. Germany’s DAX dipped 0.1 percent, while France’s CAC-40 lost 0.6 percent. The FTSE 100 edged up 0.2 percent. In Asia, Japan’s Nikkei 225 gained 0.1 percent, the Shanghai Composite Index fell 1 percent and Seoul’s Kospi was unchanged. Hong Kong’s Hang Seng shed 0.3 percent.
ENERGY: Benchmark U.S. crude rose 8 cents to close at $40.75 a barrel on the New York Mercantile Exchange. It briefly dipped below $40 a barrel for the first time since August. Brent crude, used to price international oils, rose 57 cents to close at $44.14 a barrel in London. Wholesale gasoline rose 2.8 cents to $1.266 a gallon, heating oil rose 1.2 cents to $1.38 a gallon and natural gas fell 2.4 cents to $2.347 per 1,000 cubic feet.
METALS: Precious and industrial metals prices were mixed. Gold rose 10 cents to $1,068.70 an ounce, silver declined nine cents to $14.08 an ounce and copper gave up three cents to close at $2.08 a pound.
BONDS & CURRENCIES: U.S. government bond prices held steady. The yield on the 10-year Treasury note was little changed at 2.27 percent. The dollar edged down to 123.51 yen from Tuesday’s 123.57 yen. The euro rose to $1.0664 from $1.0643.
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