Stocks higher; ConAgra Foods jumps on spinoff news
U.S. stocks rose sharply Wednesday as investors welcomed new hints that the Federal Reserve could begin to raise interest rates as early as next month. Minutes from the central bank's last meeting of its policymakers show Fed officials believed that the economy could improve enough to justify a rate hike in December.
"The market today is just reinforcing the view that most likely the Fed is going to move in December, and that's not necessarily a bad thing for either the economy" or the stock market, said Jeremy Zirin, chief equities strategist at UBS Wealth Management Americas.
The Dow Jones industrial average rose 248 points, or 1.4 percent, to 17,737. The Standard & Poor's 500 index gained 33 points, or 1.6 percent, to 2,084. The gain moved the S&P 500 back into positive territory for the year. The Nasdaq composite added 89 points, or 1.8 percent, to 5,075.
The minutes of the October meeting revealed that Fed officials believed the U.S. job market would improve further and that inflation would begin to move toward their 2 percent annual target by the time the Fed meets next month. They also took note of the U.S. economy's resilience through a summer of financial market turbulence and felt that global threats had "diminished." The Fed has kept its benchmark for short-term rates near zero since late 2008. Higher rates tend to weigh on stock markets, but investors have mostly become prepared for the Fed to act in December.
The 10 sectors in the S&P 500 rose, led by stocks in financial companies, which tend to benefit from rising interest rates.
ConAgra Foods climbed 3.8 percent after announcing that it would spin off its frozen potatoes business.
Norfolk Southern rose 5.9 percent after receiving an unsolicited offer to be bought out by Canadian Pacific.
Jack in the Box climbed 5.9 percent after the burger chain gave an upbeat 2016 profit outlook.
Target slumped 4.9 percent after the retailer reported that its sales at established locations increased in the third quarter at a slower rate than in the previous quarter.
Citrix Systems slid 9.8 percent on news that the computing company will slash about 1,000 jobs and spin off its GoTo business into a separate company as it seeks to cut costs.
The Commerce Department's latest tally of home construction showed that builders broke ground on fewer houses and apartments in October. A steep drop in apartment construction contributed to the 11 percent slide in housing starts. Single-family house construction declined 2.4 percent.