Wall Street rises, minutes cement December hike

By Margreet Dietz

Traders work on the floor of the New York Stock Exchange. Photo / AP
Traders work on the floor of the New York Stock Exchange. Photo / AP

Wall Street rose, as did the US dollar, after minutes from the latest Federal Open Market Committee meeting underpinned bets the central bank will increase interest rates in December.

"December was already priced in so this is just confirming," Melda Mergen, senior vice president and director of US equities in Boston at Columbia Threadneedle Investments, told Bloomberg. "I think they will definitely go in that direction unless something big happens."

US stocks rose. In 2.24pm trading in New York, the Dow Jones Industrial Average added 0.3 per cent, while the Nasdaq Composite Index rose 0.2 per cent. In 2.08pm trading, the Standard & Poor's 500 Index gained 0.2 per cent.

"Several members judged that it would be appropriate to increase the target range for the federal funds rate relatively soon if economic developments unfolded about as the committee expected," according to minutes of the FOMC's September meeting.

"It was noted that a reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labour market and inflation," according to he minutes.

Meanwhile the Labor Department's monthly Job Openings and Labor Turnover Survey, or JOLTS, showed job openings fell 388,000 to a seasonally adjusted 5.4 million in August, the lowest level in eight months.

"This might seem like a huge drop, but the key point here is that the JOLTS numbers have been inexplicably strong over the past few months, relative both to other indicators of the pace of hiring and the official payroll numbers," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note, according to Bloomberg.

"Further declines over the next few months would be no big deal, provided the nascent recovery in other hiring measures continues."

Investors will scrutinise Friday's speech by Fed Chair Janet Yellen for any further clues on the timing of a rate hike.

The Fed's policy makers next meet November 1-2.

In the Dow, gains in shares of Nike and those of Apple, recently 1.5 per cent and 1.3 per cent stronger respectively, outweighed slides in shares of Cisco and those of Chevron, down 2.2 per cent and 0.8 per cent respectively.

In Europe, the Stoxx 600 Index ended the day with a fall of 0.5 per cent, amid disappointing earnings including from Ericsson. France's CAC 40 Index fell 0.4 per cent, Germany's DAX Index declined 0.5 per cent, while the UK's FTSE 100 Index slid 0.7 per cent.

Shares of Premier Foods, which rejected a takeover offer by the US's McCormick earlier this year, tumbled after the UK company downgraded its full-year sales estimate because warm weather reduced sales of its gravy and stocks products as well as its desserts.

"We are disappointed that our grocery business reported materially lower sales in the quarter due to warmer weather; particularly in September," Gavin Darby, chief executive officer, said in the statement.

Shares of Premier Foods closed 6.2 per cent lower in London.

- BusinessDesk

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