NEW YORK -- U.S. stocks closed higher Wednesday and investors appeared positively inclined toward higher rates after minutes from the Federal Reserve October meeting showed a solid core of officials rallied behind a possible December rate hike.
Central bankers at the October policy meeting also debated evidence the U.S. economy's long-term potential may have permanently shifted lower.
The three major indexes added to earlier gains after the 2:00 p.m. Eastern time release and buying accelerated ahead of the close.
I think the market is ready and comfortable for an increasing Fed funds rate.
"I think the market is ready and comfortable for an increasing Fed funds rate," said Alan Rechtschaffen, portfolio manager at UBS Wealth Management Americas in New York. "We just have to turn this aircraft carrier around, get out of this zombie-like economy which is being fed on an elixir of low interest rates and get to a process of normalization."
The Dow Jones industrial average (^DJI) rose 247.66 points, or 1.4 percent, to 17,737.16, the Standard & Poor's 500 index (^GSPC) gained 33.14 points, or 1.6 percent, to 2,083.58 and the Nasdaq composite (^IXIC) added 89.19 points, or 1.8 percent, to 5,075.20.
Investors widely expect the central bank to raise rates in December, but remain uncertain about the magnitude of the increase and the pace of further hikes.
While stocks often sell off on the prospect of a rate hike, which would raise borrowing costs, many investors are now focusing on a hike as a positive reading for the economy.
"It sounds pretty hawkish to me, that they want to raise rates in December," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin. "That should be a confidence-boosting thing. That means they're more confident in our economy now."
Apple (AAPL) shares rose 3.2 percent at $117.29 after Goldman Sachs (GS) added the iPhone-maker to its "conviction buy" list, saying it sees potential for the stock gaining as much as 43 percent from current levels.
The stock provided the biggest boost to the three major indexes.
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