Wall Street up as Fed signals December interest rates hike – New York Report
Indications from the Federal Reserve’s October policy meeting yesterday that there is solid core of officials backing a possible December rate hike pushed US stocks up by more than one per cent.
The Dow Jones industrial average rose 247.66 points, or 1.42 per cent, to 17,737.16, the S&P 500 gained 33.14 points, or 1.62 per cent, to 2,083.58 and the Nasdaq Composite added 89.19 points, or 1.79 per cent, to 5,075.20.
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, Texas.
“That should be a confidence-boosting thing. That means they’re more confident in our economy now.”
Apple’s shares closed up 3.2 per cent at $117.29 after Goldman Sachs added the iPhone maker to its “conviction buy” list, saying it sees potential for the stock gaining as much as 43 per cent from current levels.
All 10 S&P sectors closed higher, led by a two per cent rise in healthcare, followed by a 1.8 per cent rise for the financial sector.
Qualcomm and Target were the biggest drags on the S&P. Qualcomm fell 9.4 per cent after a South Korean regulator alleged it violated competition laws.
Target fell 4.3 per cent after warning it will miss its fiscal-year forecast for online sales growth.