US stocks firmed at midsession on Wednesday, as investors brushed away some disappointment that oil inventories did not fall as much as forecast and focused on what looks set to be a no-change to Federal Reserve rates at 1400 ET.
Merger activity also helped boost stocks, especially smaller-caps.
The S&P 500 index bellwether was up 0.18% at 2,079, while the S&P Midcap 400 gained 0.6% to 1,485 and the S&P Smallcap 600 advanced by 0.7% to 708.
Federal Reserve policymakers are likely to hold open the prospect of further rate rises later this year while spurning any firm commitments on the timing as they await evidence on whether the US labour market can recover anytime soon.
US crude oil inventories fell less than forecast last week, but the decline still marked the fourth straight draw, in the latest indication the glut of supply may be easing.
US oil stocks fell by 933,000 barrels last week, the Energy Department reported. That was well short of the 2.1mln barrel decline that analysts expected, but it brings the fall over the last four weeks to almost 8mln barrels.
Nevertheless, US oil futures fell 0.7% to $48.14 even if the bourse was looking towards the Fed for direction.
Open
Stocks pulled out of their slump this morning, with strong gains seen among blue-chips.
The S&P 500 was up eight points at 2,083 after half an hour or so of trading, with mining giant Freeport McMoRan Inc (NYSE:FCX) the top riser, up 6.
Mid-caps, as measured by the S&P 400, were also going well, with the index up 6.5 at 1,484. Small caps, as tracked by the Russell 2,000 index, were left a bit behind, with the index up just over three points to 1,151.
On the NYSE, insurance technology software provider Patriot National Inc (NYSE:PN) was the top performer, rising 31% to $9.07, as sector peer Ebix Inc (NASDAQ:EBIX) launched an offer for the company.
Ebix, which also supplies software solutions to the insurance industry, is offering $9.50 a share through a mixture of cash and shares.
MORE DETAILS: Ebix looking to swallow rival
On Nasdaq, Aegerion Pharmaceuticals Inc (NASDAQ:AEGR) was setting the pace, up 44% at $1.92, as it agreed to be taken over by QLT Inc (NASDAQ:QLTI, TSE:QLT).
Upon completion of the proposed merger, each outstanding share of Aegerion common stock will be exchanged for 1.0256 shares of QLT common stock. QLT shares advanced 16.3% to C$2.14 and 11.9% to US$1.60 on the Nasdaq exchange.
Preview
The bears have been having a field day of late but bargain hunters look set to re-enter the market today.
European markets managed to stop the rot this morning and the S&P 500 is on course to do the same after sliding almost four points to 2,075. Spread betting quotes indicate the benchmark index will open at around 2079.4.
The more narrowly-based Dow Jones average is set to rise open around 35 points higher at 17,709.
The Federal Reserve is set to announce its decision on interest rates this afternoon, but all of the fun appears to have been taken out of the guessing game by alarming economic indicators that have made it almost certain the Fed will not hike rates this month.
"Gold and silver remain well supported ahead of tonight’s Fed decision and subsequent press conference by Janet Yellen. The chance of a rate hike is pretty much zero, so if there was one it would create pandemonium in the markets. However, as I say, the chances are remote so all eyes will be on the conference afterwards,” according to David Govett, head of Precious Metals at Marex Spectron.
“I suspect we will hear more of the same rhetoric from the last conferences, with Yellen stressing that the pace of rate rises will be data dependent. July is looking unlikely at the moment, but I am sure it will not be ruled out and it will be interesting to see how many of the Fed policy makers will be expecting two rate hikes this year. In March for example, nine out of seventeen were looking for this,” Govett noted.
It has taken a while for the first big trade deal to be announced since the thawing of relationships between the US and Iran, but aircraft maker Boeing Co (NYSE:BA), down 0.8% in pre-market trading, has reportedly sealed a deal with the Middle Eastern country as it seeks to update its ageing fleet.