U.S. stocks were slightly higher on Tuesday, helped by gains in financial, technology and telecom stocks, but indexes traded in a narrow range as investors stayed away from making major bets ahead of the Federal Reserve`s policy meeting.
The U.S. central bank, which begins its two-day meeting on Tuesday, is widely expected to announce on Wednesday that it will begin paring its bond holdings, with reductions likely to start in the coming months.
While a September interest rate increase is not expected, investors will closely watch Fed Chair Janet Yellen`s views on inflation, as they look for clues on whether or not the Fed will raise rates in December.
"There`s one school of thought that rates will go up because there`s some inflation coming from a very tight labour market and storms that will create very tight demand," said Rick Meckler president of LibertyView Capital Management in Jersey City, New Jersey, regarding Tuesday`s boost to bank stocks, which benefit from higher rates.
Six of the 11 major S&P sectors were higher, with the financial sector`s 1-percent gain providing the biggest boost and the biggest percentage gain was the telecom services sector`s <.splrcl> roughly 2 percent jump due to mergers and acquisitions speculation. Technology <.splrct> rose 0.5 percent.
"In a market that gets fairly fully priced, you tend to get more sector rotation," Meckler said.
At 2:59 p.m. ET, the Dow Jones Industrial Average <.dji> rose 41.46 points, or 0.19 percent, to 22,372.81, the S&P 500 <.spx> gained 2.52 points, or 0.10 percent, to 2,506.39 and the Nasdaq Composite <.ixic> added 4.49 points, or 0.07 percent, to 6,459.13.
"People are in wait-and-see mode. The expectations are that rates will remain unchanged and they (the Fed) will start balance sheet unwinding. But there`s always a possibility of surprise. I think that`s why investors are cautious," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
The biggest U.S. telephone operators, Verizon
The healthcare index <.spxhc> was one of the biggest laggards amid declines in insurers such as United Health
Advancing issues outnumbered declining ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favoured advancers.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.