epa05542651 Traders work on the floor at the Opening Bell of the New York Stock Exchange in New York, New York, USA, 16 September 2016. EPA/JUSTIN LANE
NEW YORK: US stocks were higher on Monday as oil prices bounced back from multi-week lows and investors expected the Federal Reserve to leave interest rates unchanged at its meeting this week.
Oil prices rose about 1% after Venezuela said Opec and non-Opec producers were close to a deal to stabilise an oversupplied market.
The S&P 500 energy index rose 0.69%, recouping some losses after hitting a six-week low last Wednesday.
The Fed’s two-day meeting starts on Tuesday in which policymakers will debate over the US economy and its ability to absorb a rate hike. Fed chair Janet Yellen is scheduled to conclude the meeting with a press conference at 2:00pm ET (1800 GMT) on Wednesday.
Yellen said last month the case for a rate increase had strengthened. But recent lacklustre data, including a slowdown in jobs growth, has raised doubts about the health of the economy.
“The market is resigned to the fact that the Fed won’t move in September,” said Matt Jones, head of US equity strategy at J.P. Morgan Private Bank in New York. “But some uneasiness with the Fed will be on how they talk about December.”
The probability of a December move shot up to 70% in the past month from 57.5% in the previous month, according to a Reuters poll of over 100 economists.
The CME Group’s FedWatch tool shows traders setting a 12% chance of a rate hike by Wednesday, while the odds jumped to nearly 55% for December.
The dollar index declined 0.38%, sending gold prices higher, on dim prospects of a rate increase this week.
Investors will also keep an eye on the Bank of Japan’s policy meeting on Tuesday and Wednesday, where it is largely expected to not announce further policy easing.
At 9:38am ET, the Dow Jones industrial average was up 90.87 points, or 0.5%, at 18,214.54, the S&P 500 was up 9.52 points, or 0.45%, at 2,148.68 and the Nasdaq Composite was up 22.58 points, or 0.43%, at 5,267.15.
Eight of the 11 major S&P 500 indexes were higher, with the materials sector rising the most by 0.72%. The S&P real estate index debuted on Monday with a 0.44% rise.
Shares of casino operator Isle of Capri jumped 28.5% on Monday after Eldorado Resorts said it would buy the company for US$1.7bil, including debt. Eldorado’s stock dropped 22.7%.
General Motors was the top percentage gainer on the S&P 500, up 2.52% at US$31.76, after Morgan Stanley upgraded the stock to “overweight”.
US electrical components distributor Avnet was up 7.2% at US$42.11 after it announced the sale of its IT business to tech products distributor Tech Data Corp for about US$2.6bil. Tech Data’s stock soared 17.2%.
Advancing issues outnumbered decliners on the NYSE by 2,271 to 418. On the Nasdaq, 1,698 issues rose and 659 fell.
The S&P 500 index showed five new 52-week highs and two new lows, while the Nasdaq recorded 50 new highs and seven new lows. - Reuters
