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Sep 25, 2018

Wall Street Stocks at Open; Stocks rise as higher rates lift bank shares I CNBC

Fred Imbert, Alexandra Gibbs

U.S. equities rose on Tuesday as bank stocks got a boost from higher interest rates as the Federal Reserve's policymaking committee began a two-day meeting.
The Dow Jones Industrial Average climbed 60 points as Walmart outperformed. The S&P 500 gained 0.1 percent as energy and financials rose. The Nasdaq Composite traded along the flatline, however, as Apple was under pressure.
Shares of Bank of America rose 0.3 percent, while J.P. Morgan Chase and Citigroup gained half a percent and 0.7 percent, respectively. Goldman Sachs advanced 0.2 percent while Morgan Stanley climbed 0.4 percent.
Bank stocks gained as the 10-year Treasury note yield climbed to 3.11 percent, near its highest level of the year. The rise in yields comes as the Federal Open Market Committee begins its two-day monetary policy meeting, with analysts expecting the U.S. Federal Reserve to announce a quarter-point rate hike when it concludes its meeting tomorrow.
Traders work on the floor of the New York Stock Exchange.
Bryan R. Smith | Getty Images
Traders work on the floor of the New York Stock Exchange.
The event will be watched closely to see if the central bank provides any signals as to where monetary policy will be heading over the coming months and into next year. Most respondents to the latest CNBC Fed Survey expect the central bank to raise rates two more times before year-end.
"The drive toward normalization, which includes the FOMC beginning to reduce its balance sheet by a maximum of $150B per quarter on Monday, still sources the stiffest secular headwind for the market," Jeremy Klein, chief market strategist at FBN Securities, said in a note. "If tariffs do much more harm than I surmise, than Jerome Powell and his colleagues could drag their feet when removing accommodative measures."
Tuesday's gains come after equities closed lower on Monday in part because of the cancellation of trade talks between the U.S. and China as tensions between the largest world economies continue to simmer. The two countries slapped tariffs on each other's goods last week and took effect on Monday.
China's Vice Commerce Minister Wang Shouwen said Tuesday that it was tough to proceed with trade negotiations at present and that it would be dependent on the "will" of the United States as to when talks would resume.
Apple shares fell 0.2 percent after Qualcomm accused the tech giant of stealing secrets and giving them to Intel.

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