Equities rally as oil bounces; Fed decision on deck
By Chuck Mikolajczak
NEW YORK (Reuters) - Global equity markets rallied on Tuesday as oil prices bounced from multi-year lows, though investors remained leery about the possibility of increased volatility with a widely-anticipated increase in U.S. interest rates due later this week.
Oil reversed early falls to snap a six-day slide as bargain hunters moved in after crude dropped to its lowest level since December 2008 in the prior session. The jump helped boost equities in both the United States and the Europe.
The S&P energy index .SPNY rallied 2.9 percent as the best performing of the 10 major S&P sectors, its biggest daily percentage gain in a month.
Top officials at the Federal Reserve on Tuesday began a two-day policy meeting that is expected to end with the first U.S. interest rate increase since 2006.
The rate rise is largely priced in, as traders see more than an 80-percent chance the central bank will lift its targeted rate range to 0.25 percent to 0.50 percent from the current zero to 0.25 percent range, according to CME Group's FedWatch program.
"The economy is getting a little bit better and raising rates does not mean the market is going lower, it’s actually a positive sign," said Joseph Benanti, managing director, sales and trading at Rosenblatt Securities in New York.
The Dow Jones industrial average .DJI rose 156.41 points, or 0.9 percent, to 17,524.91, the S&P 500 .SPX gained 21.47 points, or 1.06 percent, to 2,043.41 and the Nasdaq Composite .IXIC added 43.13 points, or 0.87 percent, to 4,995.36.
MSCI's all-country world index .MIWD00000PUS rose 0.9 percent, while the pan-European FTSEurofirst 300 .FTEU3 index closed up 2.9 percent, its best day since Oct. 5. Continued...