US stocks close higher
Gov't bond yields up
All eyes on Fed meet
US stocks finished higher as attention turns to the Fed statement and the policy for interest rates tomorrow.
The Dow Jones added 116 points to 24,727, while the S&P 500 added around four points to close at 2,716.
The Nasdaq added over 20 points at 7,364.
In Toronto, the TSX added over 36 points at 15,625.
US crude - West Texas Intermediate - added 2.19% to US$63.42 a barrel.
MID-SESSION
US. stocks struggled to find their footing in mid-day trading, with shares in the social media giant Facebook(Nasdaq:FB) shedding another 4.7 per cent to US$164.05 and any gains being led by energy stocks which benefited from a jump in the price of oil.
The S&P 500 saw little movement, inching up by close to 7 points to 2,720. The Dow’s performance was a tad better as it recorded an increase of 159 points to 24,770 while the Nasdaq inched up more than 26 points to 7,370. In Toronto, the TSX was up 29 points at 15,618.
Yields on government bonds rose, meanwhile, as investors zeroed in on the expected quarter percentage point interest rate hike and additional monetary guidance which are expected to come at the conclusion on Wednesday of the Federal Reserve’s first meeting under its new chairman Jerome Powell.
The yield on 10-year Treasuries jumped three basis points to 2.88 per cent; yields on 10-year German bonds climbed 2 basis points to 0.58 per cent while UK 10-year government bond yields climbed 3 basis points to 1.48 per cent.
Oil was up 2.2 per cent at US$63.40 per barrel, due to unrest in the Middle East as well as sinking output from Venezuela, pushing up the share prices of Marathon Petroleum(NYSE:MPC) and Anadarko Petroleum(NYSE:APC) by 3 per cent respectively.
Tuesday’s mid-day session suggests that investors are being held back by concerns about the Federal Reserve’s two-day meeting and reports that US President Donald Trump may look to impose new tariffs on imports from China this week.
Meanwhile, Facebook(Nasdaq:FB), which saw its shares drop by 7 per cent in Monday’s session, still faces criticism following reports that a UK data mining firm working for the Trump election campaign improperly obtained and kept data on tens of millions of users.
The US dollar rose slightly against other currencies, with the US dollar index up 0.6 per cent and the euro losing 0.4 per cent against it to $1.2284 while the British pound fell 0.1 per cent to $1.401. The Canadian dollar was down against the dollar at 76.40 cents.
Among the losers in New York in mid-day trading were the conglomerate General Electric(NYSE:GE), which lost 3 per cent, the beer company Molson Coors Brewing(NYSE:TAP), which also reported a 3.2 per cent deduction, and the toy company Mattel(Nasdaq:MAT), which was down 3.3 per cent.
A number of big companies’ earnings are set for this week, such as FedEx(NYSE:FDX), Nike(NYSE:NKE), PetroChina(NYSE:PTR) and Hermes(EPA:RMS).
OPEN
US stocks started on the front foot, with all three major benchmarks in positive territory.
The Dow Jones added 111 points at 24,722, while the broader S&P 500 gained 6.76 at 2,719 and the Nasdaq added around 24 points at 7,368.
In Toronto, the TSX added over 37 points to 15,626.
It comes ahead of an interest rate decision expected tomorrow from the US Federal Reserve.
“I expect the Fed to implement ‘steady and gradual’ hikes on a quarterly basis throughout 2018. March, June and September hikes appear close to guaranteed, with a fourth rate hike in December looking increasingly unlikely,” predicted Damian Testi, an investment manager at Walker Crips.
“These dates are the most probable trigger points given the meetings are accompanied by a ‘Summary of Economic Projections’ and press conference from Jerome Powell. The Fed’s mandate to transparently articulate its economic stance to the market is more important now than ever as the current bull market moves through its tenth year,” Testi added.
In stocks, Oracle Corp (NASDAQ:ORCL) was a notable loser, with the stock tumbling almost 9% to US$47.30 after it reported third quarter revenue that missed forecasts, reflecting disappointing sales from its cloud business.
Revenue rose by 6.1% to US$9.77bn in the quarter ended February 28, below analysts’ estimates of US$9.78bn.
Facebook Inc (NASDAQ:FB) shares are on the slide again on Tuesday as the privacy and data row erupted at the weekend and continues to do so now.
Shares shed 2.56% to stand at US$168.02.
Elsewhere, Arena Pharmaceuticals Inc (NASDAQ: ARNA) shares added over 30% to US$40.40 as the drug maker said its phase 2 OASIS trial for Ulcerative Colitis treatment met primary and all secondary endpoints.
The company plans to now kick off a phase 3 trial.
Proteostasis Therapeutics Inc (NASDAQ:PTI) shares lost over 19% to US$5.63 as the group reported a proposed public offering of common stock.