Higher oil lifts stocks before Fed rate decision
By Richard Leong
NEW YORK (Reuters) - Global stock prices rose for a second day on Wednesday with the S&P 500 hitting its highest in almost a month as investors awaited the U.S. Federal Reserve decision on whether raise interest rates for the first time in almost a decade.
Brent crude prices jumped 4 percent on a drop in U.S. crude inventories in the latest week, lifting energy shares and the broader equity market.
"Energy was what gave it the initial spark and the fact the energy rally kept rolling gave people reassurance they could step into other sectors as well," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
The dollar fell on a surprise dip in domestic inflation in August, which reduced expectations of a U.S. central bank rate increase on Thursday.
Short-term U.S. bond yields held below a near 4-1/2 year high and gold prices rose on the news the U.S. Consumer Price Index fell 0.1 percent in August.
A Reuters poll released on Wednesday suggested a rate hike remains a close call, although a little more than half the 80 economists surveyed reckoned the Fed will refrain from raising rates.
U.S. money market rates, however, implied traders see a little more than a 1 in 4 chance of a rate increase on Thursday.
Subdued domestic inflation is seen as a critical factor among some economists, together with the recent global market turbulence, that could cause the Fed to stick to its near-zero interest rate policy at its two-day meeting that ends Thursday. Continued...