Economy

United States stocks close higher ahead of Fed meeting

United States stocks close higher ahead of Fed meeting”

After reaching new all-time highs during the Monday trading session, Wall Street's two main indexes - the S&P 500 and the Dow closed at record levels for yet another day.

Shares of the major banks Bank of America, Morgan Stanley and Citigroup were up more than 1 percent.

The S&P 500 hit 2,500 for the first time on Friday and the Dow had its best week of gains for the year as well.

The consumer staples sector.SPLRCS fell 0.9 percent while the utilities sector.SPLRCU ended 0.8 percent lower.

"Market continues to firm up".

The Fed meeting, which starts today, is expected to yield details on how the central bank will unwind its US$4.2 trillion (RM17.6 trillion) portfolio of Treasuries and mortgage-backed securities, almost a decade after the global financial crisis.

The meeting is unlikely to result in an interest rate increase, but investors will focus on how Fed Chair Janet Yellen views recent inflation readings for clues on the timing of further rate hikes.

The Fed left rates unchanged for now, as was widely anticipated, but investors' expectations changed for December after the US central bank signaled one more rate hike by year-end despite recent weak inflation readings.

After the statement traders were betting on a roughly 67 percent chance of a December hike, compared with 51 percent minutes before, according to the CME Group's FedWatch tool.

In addition to discussing inflation, which ticked a little higher in August after months on life-support, the Fed is also widely expected to announce the start of tapering down its multi-trillion-investment holdings - ending a stimulus program put in place after the global financial crisis and tightening the money supply.

At 10:59 a.m. ET (1459 GMT), the Dow Jones Industrial Average was up 71.16 points, or 0.32 percent, at 22,339.5, the S&P 500 was up 5.83 points, or 0.233179 percent, at 2,506.06 and the Nasdaq Composite was up 20.94 points, or 0.32 percent, at 6,469.41.

Orbital ATK jumped 19.84 percent after Northrop Grumman said it would buy the missile and rocket maker for about $7.8 billion in cash.

The S&P's financial.SPSY sector ended 0.6 percent higher as banks benefit from higher rates.

Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored advancers.

Gold again fell - down 1.2% to $US1,309 an ounce, while West Texas Intermediate oil futures (WTI) oil futures jumped to a touch under $US50 a barrel in NY.



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