U.S. Stocks Mostly Higher As Traders Look Ahead To Fed Decision

Stocks have moved mostly higher during trading on Monday, with the major averages all moving to the upside after ending last Friday’s session narrowly mixed. The Dow has edged higher after closing lower for seven straight sessions.

The Dow briefly dipped into negative territory in recent trading but is currently up 28.03 points or 0.1 percent at 43,856.09. The Nasdaq is up 120.95 points or 0.6 percent at 20,047.67 and the S&P 500 is up 20.01 points or 0.3 percent at 6,071.10.

The strength on Wall Street may partly reflect optimism about the outlook for interest rates ahead of the Federal Reserve’s monetary policy decision on Wednesday.

The Fed is widely expected to continue cutting interest rates, with CME Group’s FedWatch Tool currently indicating a 99.1 percent chance the central bank will lower rates by another 25 basis points.

Traders are likely to pay close attention to the Fed’s accompanying statement as well as officials’ latest economic projections, including their forecasts for rates.

Buying interest has been somewhat subdued, however, as recent data showing inflation remains somewhat sticky has led to some worries the Fed will lower rates slower than previously anticipated next year.

In U.S. economic news, the Federal Reserve Bank of New York released a report showing a sharp pullback by its reading on regional manufacturing activity in the month of December.

The New York Fed said its general business conditions index plummeted to 0.2 in December after spiking to 31.2 in November, although a positive reading still indicates growth. Economists had expected the index to tumble to 12.0.

Looking ahead, the New York Fed said firms remained fairly optimistic conditions would continue to improve in the months ahead, but the index for future business activity slid to 24.6 in December from 33.2 in November.

Sector News

Networking stocks are extending the strong upward move seen over the past few sessions, with the NYSE Arca Networking Index climbing by 1.4 percent to a record intraday high.

Significant strength is also visible among semiconductor stocks, as reflected by the 1.4 percent gain being posted by the Philadelphia Semiconductor Index.

Broadcom (AVGO) is extending the surge seen last Friday, while Micron (MU) is also posting a standout gain after JPMorgan said it expects the chipmaker to report strong fiscal first quarter results after the close of trading on Wednesday.

Biotechnology stocks are also seeing some strength on the day, while oil and gold stocks have shown notable moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index closed just below the unchanged and China’s Shanghai Composite Index edged down by 0.2 percent, while Hong Kong’s Hang Seng Index slid by 0.9 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.7 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both down by 0.3 percent.

In the bond market, treasuries are seeing modest strength after trending lower over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 4.387 percent.

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