Share

US stocks surge ahead of Fed rate decision

New York - Wall Street stocks rose solidly on Tuesday, taking cues from European bourses and the oil market ahead of an expected US Federal Reserve interest rate hike.

The Dow Jones Industrial Average climbed 156.41 points (0.90%) to 17 524.91.

The broad-based S&P 500 rose 21.47 (1.06%) to 2 043.41, while the tech-rich Nasdaq Composite Index gained 43.13 (0.87%) to 4 995.36.

European stocks posted even larger gains as oil prices rose following a bruising stretch since the Organisation of the Petroleum Exporting Countries on December 4 took no action to cut output in response to declining prices.

Analysts said last week's retreat in stocks set the stage for a rally.

"The market got oversold a bit and is now going through a bounce that I think will continue once the Fed will do what most people believe they're going to do, that's raise rates," said Sam Stovall, chief investment strategist at S&P Capital IQ.

A decision by the Fed to hike rates on Wednesday will "lift the veil of uncertainty", he added.

Petroleum-linked stocks were strong, with Dow members Chevron and ExxonMobil gaining 3.8% and 4.5% respectively and oil services company Weatherford International climbing 4.6%.

Other strong sectors included large banks, which are expected to score higher profits from increased interest rates, and biotech stocks.

Apple dropped 1.8% after Credit Suisse predicted a "subdued iPhone cycle for the next few quarters" at the tech giant. Credit Suisse pointed to a lacklustre outlook from Apple supplier Dialog Semiconductor, which cited "weaker than expected" demand in mobile systems.

Oil services company Baker Hughes fell 0.6% after it and Halliburton pushed back the deadline for a proposed merger following objections by antitrust officials to their divestment plan. Halliburton rose 1.5%.

Dow member 3M Company dropped 6.0% as it projected full-year earnings of $7.55 per share, below the prior range of $7.60 to $7.65 per share. 3M blamed the "realities of a continued slow-growth global economy".

Valeant Pharmaceuticals International bolted 16.4% higher after announcing a new distribution agreement with pharmacy chain Walgreens that will reduce prices on branded dermatological and ophthalmological products by 10%. Walgreens' parent, Walgreens Boots Alliance, dipped 0.6%.

Chipmaker Qualcomm rose 2.5% as it ruled out a breakup of the company following a strategic review, rejecting a campaign by activist fund Jana Partners.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.90
-0.0%
Rand - Euro
20.44
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.1%
Platinum
908.75
+1.3%
Palladium
1,014.28
+1.3%
Gold
2,218.96
+1.1%
Silver
24.81
+0.7%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders