NEW YORK (AP) — Stocks are edging higher Wednesday morning as investors expect the Federal Reserve to raise interest rates, which would be a vote of confidence in the U.S. economy. Utility companies, which have struggled throughout the year, gained ground.
KEEPING SCORE: The Dow Jones industrial average rose 28 points, or 0.2 percent, to 17,553 as of 11:05 a.m. Eastern time. The Standard & Poor’s 500 index gained 5 points, or 0.2 percent, to 2,048. The Nasdaq composite edged up 10 points, or 0.2 percent, to 2,048. The Dow climbed as much as 165 points in the first few minutes of trading but surrendered most of those gains by late morning. Utility stocks rose 1.8 percent and telecom stocks were up 1.2 percent.
THE FED: The Federal Reserve is expected to raise interest rates for the first time in almost a decade. The move would be a sign the Fed is confident that the U.S. economy has improved a great deal since the financial crisis. Investors will pay close attention to what the Fed says about its future plans on interest rate policy.
THE QUOTE: Stephen Freedman, senior investment strategist at UBS Wealth Management Americas, said he’s interested in the Fed’s comments about inflation, the U.S. labor market, and international developments. When the Fed held off on raising rates in September, the shaky global economy was a key reason. Freedman said the Fed is likely to take some time restoring rates to normal levels.
“Three or four hikes next year would be, historically speaking, extremely slow and progressive,” he said.
CHANGING TIMES: Exactly seven years ago, the Fed cut its key interest rate to nearly zero because of deteriorating conditions in the economy and in financial markets. Spending, business investment and industrial production all fell. The Fed said on Dec. 16, 2008 that the Federal funds rate would be “exceptionally low… for some time.” The S&P 500 index was well under 900 points then, and now it’s over 2,000.
ENERGY: Oil prices fell after the U.S. government said stockpiles grew 4.8 million barrels last week. Benchmark U.S. crude dropped $1.61, or 4.3 percent, to $35.73 a barrel in New York and Brent crude, a benchmark for international oils, $1.34, or 3.5 percent, to $37.39 a barrel in London. U.S. crude has climbed over the last two days after falling beneath $35 a barrel Monday.
Natural gas prices, which have dropped to 16-year-lows, lost 3 cents to $1.79 per 1,000 cubic feet. Natural gas has been falling as traders anticipate weaker demand for home heating due to the unseasonably warm winter weather in the U.S.
HEARTLAND: Payment card processor Heartland Payments accepted an offer from Global Payments worth $100 per share, or $4.3 billion. Heartland provides credit, debit, and prepaid card processing and security technology services nationwide. Its shares rose $8.79, or 10.3 percent, to $93.89.
VALEANT RISES AGAIN: Canadian drugmaker Valeant Pharmaceuticals cut its guidance, but investors were pleased with its outlook for 2016. Its stock has lost more than half its value since reaching a record high in August as Valeant’s business model and pricing came under close scrutiny from industry analysts and members of Congress. On Wednesday the shares added $8.31, or 7.6 percent, to $117.90.
HOUSING GAINS: The pace of homebuilding increased in November on a big jump in apartment construction in the Midwest and South, while construction of single-family houses reached an eight-year high. The Commerce Department said Wednesday that total housing starts climbed 10.5 percent.
Beazer Homes rose 22 cents, or 1.9 percent, to $11.71. D.R. Horton added 48 cents, or 1.5 percent, to $31.94 and PulteGroup gained 35 cents, or 2 percent, to $17.74.
SWEET HONEYWELL: Investors were pleased with the 2016 outlook from manufacturing conglomerate Honeywell, which also backed its 2015 forecast. Honeywell rose $3.97, or 4 percent, to $102.44.
ACROSS THE ATLANTIC: European markets rose The FTSE 100 index of leading British shares was up 0.7 percent and the CAC-40 in France rose 0.3 percent. Germany’s DAX was 0.3 percent higher.
BONDS, CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.30 percent from 2.27 percent. The euro edged up to $1.0931 from $1.0917 late Thursday while the dollar rose to 121.85 yen from 121.73 yen.
____
Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay.
Comment count on this article reflects comments made on Breitbart.com and Facebook. Visit Breitbart's Facebook Page.