NEW YORK: The S&P and the Dow hit record levels in early afternoon trading on Tuesday as Boeing rose and bank stocks gained ahead of a near certain move by the Federal Reserve to raise interest rate.
Goldman Sachs rose 2.4 percent and JPMorgan and Bank of America gained about 1 percent. The stocks lifted the S&P financial index by 0.9 percent.
Boeing rose as much as 3.4 percent to $292.8 after the company said it would raise its quarterly dividend by 20 percent and replace its existing share buyback program with a new $18 billion authorization.
At 12:41 p.m. ET (1741 GMT), the Dow Jones industrial average was up 139.7 points, or 0.57 percent, at 24,525.73, the S&P 500 was up 7.55 points, or 0.28 percent, at 2,667.54 and the Nasdaq Composite was up 1.62 points, or 0.02 percent, at 6,876.70.
Losses in technology heavyweights, including Apple and Facebook, dragged on the Nasdaq.
“You’re going to see rotation when you go into the end of the year. Some of the profits were taken off the table for big winners such as technology and into sectors that have not done as well, such as finance and energy,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
The Fed is widely expected to raise its benchmark interest rate for third time this year at the end of the meeting on Wednesday. Traders see an 87.6 percent chance of a 25 basis point rate hike, according to the CME Group’s Fedwatch tool.
Investors will watch for the central bank’s forecast on future rate hikes and its view on the health of the economy.
“The market is anticipating 1-2 rate hikes and the Fed is looking at 3-4 (in 2018). There is going to be some reconciliation of those opinions, and so far in the last few years, the market has been more right than the Fed has,” said Nolte.
A Labor Department report showed US producer prices rose in November as gasoline prices surged and the cost of other goods increased, leading to the largest annual gain in nearly six years and pointing to a broad acceleration in wholesale price pressures.
Losses in utilities and energy sectors were offset by gains in nine other S&P 500 sectors, with telecom services.
Among other stocks, Verizon rose 2.3 percent following a broker upgrade and Tesla was up 2.1 percent after PepsiCo reserved 100 of company’s new electric Semi trucks.
Comcast shares rose about 1.94 percent after the company abandoned its bid for most of the assets of Twenty-First Century Fox, leaving Walt Disney as the sole suitor of the $40 billion-plus deal.
Advancing issues outnumbered decliners on the NYSE by 1,412 to 1,404. On the Nasdaq, 1,503 issues rose and 1,364 fell.
Source: Brecorder.com
