S&P 500, Nasdaq end higher as investors turn focus to Fed

S&P 500, Nasdaq end higher as investors turn focus to Fed

NYSE Jun12
Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: US stocks ended slightly higher on Tuesday (Jun 12), boosted by gains in technology and utilities shares, though investors were cautious ahead of the Federal Reserve's policy decision.

The Fed is widely expected to raise interest rates for the second time this year when it concludes its policy meeting on Wednesday.

Investors are focused on how the Fed characterises its monetary policy, looking for hints if it would move to raise rates three or four times this year.

But shares of S&P 500 utilities, up 1.3 per cent, and technology, up 0.6 per cent, helped to lift the S&P 500.

Investors also awaited a court ruling, which was expected after the closing bell, that would decide the fate of AT&T Inc's US$85 billion offer for Time Warner. Shares of AT&T ended up 0.5 per cent, while Time Warner was flat and Charter Communications gained 2.8 per cent.

"The Time Warner ruling has ramifications for other potential deals, so I think people are gearing up for that," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Investors appeared to shrug off a historic US-North Korea summit. President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearisation of the Korean peninsula, but their joint statement gave few details on how the goal would be achieved.

While defense stocks such as Raytheon, Lockheed Martin and Northrop Grumman dipped, the broader markets saw little impact from the summit.

The Dow Jones Industrial Average fell 1.58 points (0.01 per cent) to 25,320.73, the S&P 500 gained 4.85 points (0.17 per cent) to 2,786.85 and the Nasdaq Composite added 43.87 points (0.57 per cent) to 7,703.79.

Data on Tuesday showed US consumer prices rose marginally in May as gasoline price increases slowed and the underlying trend continued to suggest moderate inflation in the economy.

"There's a little bit of hesitancy going into the Fed meeting. People are unsure what the Fed is going to say," said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.

"I don't think they're going to say anything particularly related to a rate hike in December. If they say a little too much about inflation, that's going to give the market a reason to get concerned."

Tesla Inc shares were up 3.2 per cent after it said it is cutting several thousand jobs across the company.

Twitter gained five per cent after J.P. Morgan raised its price target on the stock by US$11 to US$50, saying it was confident about the company's advertising revenue growth.

Declining issues outnumbered advancing ones on the NYSE by a 1.02-to-1 ratio

The S&P 500 posted 4,241 new 52-week highs and 22 new lows; the Nasdaq Composite recorded 154,139 new highs and 2,622 new lows.

About 6.4 billion shares changed hands on U.S. exchanges. That compares with the 6.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Source: Reuters/de