Stocks Hit Record Intraday Highs as Financials Gain Before US Fed Meeting

Traders Timothy Nick left Peter Tuchman center and Gordon Charlop work on the floor of the New York Stock Exchange Thursday

It was widely expected that the U.S. central bank won't raise interest rates following the meeting, but investors believe the Fed will announce the unwinding of its $4.5-trillion balance sheet.

He added, "Given these latest projections and the broadly unchanged language on inflation in today's policy statement, we now expect the Fed to push on and raise rates again in December".

"The market could throw a little bit of a fit if they push (balance sheet reduction) back".

China stocks edged higher, bolstered by strong gains in consumer stocks and "new energy" vehicle manufacturers, with sentiment propped up improving business confidence and expectations that Beijing will maintain stability in financial markets ahead of a key party congress.

The S&P 500 ended the day 0.15% higher at 2,503.87 thanks in part to a rally in bank stocks on the prospect of higher rates - that offset a fall in interest rate-sensitive utilities (which like lower rates). The sector has risen in eight of the last nine sessions and has clocked a 6.7 percent gain in that time as investors anticipated the Fed meeting.

If the Fed reduces its balance sheet, investors are betting that would lift yields for longer-term treasuries, which could boost bank profits, Detrick said.

At 9:38 a.m. ET (1338 GMT), the Dow Jones Industrial Average was up 21.79 points, or 0.1 percent, at 22,353.14, the S&P 500 was up 1.13 points, or 0.04 percent, at 2,505 and the Nasdaq Composite was up 4.18 points, or 0.06 percent, at 6,458.82.


The Dow, however, managed to climb to a fresh record after open, helped by Chevron's 0.9 percent rise. However, Japan's Nikkei 225 Index jumped by 2 percent.

The biggest USA telephone operators, Verizon VZ.N and AT&T T.N , rose more than 2 percent, providing the second- and third-biggest individual stock boosts for the S&P.

While waiting for the U.S. Energy Information Administration to release its at 10:30AM ET (14:30GMT) Wednesday, rose 1.24% to $50.52 by 7:09AM ET (11:09GMT), while gained 1.25% to $55.83. The stock was one of the biggest drags on the consumer discretionary index .SPLRCD .

Pfizer PFE.N was up more than 1 percent after Morgan Stanley upgraded stock to "overweight".

JPMorgan Chase (JPM) advanced 1.2% and Goldman Sachs (GS) increased 1% to be among the top gainers on the Dow.

Roughly 6.7 billion shares changed hands on US exchanges compared with the 6 billion average for the last 20 sessions. That compares with the 5.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

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