US stocks recovered from early losses on Monday to close higher, helped by firmer oil prices, as investors awaited an expected Federal Reserve interest rate hike later in the week. Utility companies, which have struggled throughout the year, gained ground. The Nasdaq composite index dropped 36 points, or 0.7 percent, to 4,896. Utility stocks rose 1.8 percent and telecom stocks were up 1.2 percent.
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The Federal Reserve begins a two-day policy meeting on Tuesday at which it is expected to raise interest rates for the first time in almost a decade. A rate hike would signal confidence in the USA economy, but some investors worry it may slow growth.
“The big obvious elephant in the room for this week is the Fed”, he said.
The Commerce Department also said building permits unexpectedly surged up 11 percent to a rate of 1.289 million in November from the revised October rate of 1.161 million. “Although markets are prepared for a rate rise, the disparity in forecasts may mean there is still a strong reaction in trading”, he said.
Industrial production fell at the fastest pace since March 2012.
The Fed has held short-term rates near zero since December 2008, helping to boost stocks since the financial crisis.
The S&P 500 index showed eight new 52-week highs and three lows, while the Nasdaq recorded 18 new highs and 79 new lows.
USA oil prices fell 38 cents to $35.24 a barrel early Monday, continuing a downward spiral. United States crude advanced 1.9 per cent at $37. USA crude has fallen for six days in a row and has hit the lowest prices in nearly seven years. The broad Stoxx Europe 600 index was up 2.1% and shares of the German DAX was up 2.4% and the CAC 40 in Paris was 2.5% higher.
Newell Rubbermaid slumped as it said it will pay Jarden shareholders $60 a share in cash and stock. Heartland provides credit, debit, and prepaid card processing and security technology services nationwide.
Newell Rubbermaid was down 7.3 percent at $41.99.
VALEANT RISES AGAIN: Canadian drugmaker Valeant Pharmaceuticals cut its guidance, but investors were pleased with its outlook for 2016.
Shares of GoPro Inc. plunged 9.6% after analysts at Citibank downgraded the stock to neutral from buy. “We had oil dip below $35 a barrel and then ending up the day higher”. The Commerce Department said Wednesday that total housing starts climbed 10.5 percent.
Natural gas fell 9.6 cents, or 4.8 percent, to $1.894 per 1,000 cubic feet.
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Apple was down 1.3 percent at $109.05 as Bank of America Merrill Lynch joined a growing Wall Street chorus on lower iPhone sales expectations. Near 7:16 a.m. ET, Dow futures were up 141 points (0.8%), S&P 500 futures were up 16 points (0.81%), and Nasdaq futures were up 27 points (0.6%). South Korea’s Kospi was up 0.3 percent at 1,932.97. Australia’s ASX All Ordinaries Index added 0.18%, South Korea’s Kospi Index rose 0.21% and Singapore’s Straits Times Index gained 0.33%.
