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US stocks finish higher ahead of Fed announcement

Wall Street stocks finished higher as investors weighed continued violence in Iraq with mixed US economic data and looked ahead to a Federal Reserve policy statement on Wednesday.

NEW YORK: Wall Street stocks on Tuesday finished higher as investors weighed continued violence in Iraq with mixed US economic data and looked ahead to a Federal Reserve policy statement on Wednesday.

The Dow Jones Industrial Average rose 27.48 points (0.16 per cent) to 16,808.49.

The broad-based S&P 500 gained 4.21 (0.22 per cent) to 1,941.99, while the tech-rich Nasdaq Composite Index increased 16.13 (0.37 per cent) to 4,337.23.

Violence in Iraq remained in focus as fighting approached Baghdad, the Iraqi prime minister fired several top security commanders and Iraq's representative to the United Nations described the current upheaval as Iraq's "biggest threat to its sovereignty and territorial integrity" in years.

In economic releases, new US home construction and applications for building permits slowed sharply in May, while US consumer prices rose in May rose more than expected.

Mace Blicksilver, director of Marblehead Asset Management, said investors are hoping for an upbeat appraisal on the economy from the Fed Wednesday.

"People want to hear things are getting better," Blicksilver said. "No one wants to hear that we still need crisis interest rates."

Financial stocks had a good day after investment bank Jefferies reported higher second-quarter earnings thanks to a 19 per cent rise in investment banking revenues and a nearly seven per cent boost in trading revenues.

Holding company Leucadia National Corporation, which owns Jefferies, advanced 1.4 per cent. Also gaining were Bank of America (+2.0 per cent), Goldman Sachs (+1.4 per cent) and Morgan Stanley (+2.5 per cent).

Engineering and construction company Chicago Bridge & Iron sank 7.2 per cent after research firm Prescience Point released a report that said CBI "used creative acquisition accounting to conceal losses" following a 2013 purchase of Shaw Group.

Canadian pharmaceutical company Valeant announced it would bring its acquisition bid directly to Allergan shareholders after the US Botox-maker's repeated rejections of its proposals. Valeant rose 1.0 per cent, while Allergan gained 0.7 per cent.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.66 per cent from 2.60 per cent, while the 30-year advanced to 3.45 per cent from 3.40 per cent. Bond prices and yields move inversely.

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