Dollar falls, U.S. stocks dip as Dec rate hike seen

Thu Nov 19, 2015 4:53pm EST
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By Lewis Krauskopf

NEW YORK (Reuters) - The U.S. dollar pulled back on Thursday after four sessions of gains and U.S. stocks edged lower in choppy trade as the prospect that the U.S. Federal Reserve will hike interest rates next month gained steam.

Shares in major European markets rallied, while U.S. crude again dipped below $40 a barrel before rebounding.

U.S. data showed fewer Americans filed for unemployment benefits last week, further supporting the view that the Fed will raise interest rates in December after seven years near zero.

U.S. rate futures on Thursday implied traders see a 72 percent chance the Fed will raise rates at that meeting, compared with a 68 percent chance on Wednesday, according to CME Group's FedWatch.

"Finally, we are somewhat accepting of the fact that it looks like the Fed will pull the trigger come December," said Chip Cobb, senior vice president at Bryn Mawr Trust Asset Management in Bryn Mawr, Pennsylvania. "Everyone is just waiting for the December meeting to come and go."

The Dow Jones industrial average .DJI fell 4.41 points, or 0.02 percent, to 17,732.75, the S&P 500 .SPX lost 2.34 points, or 0.11 percent, to 2,081.24 and the Nasdaq Composite .IXIC dropped 1.56 points, or 0.03 percent, to 5,073.64.

"We would not be surprised if we limp through to mid-December," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "It's less than a month away from the Fed decision and I'm not sure anyone wants to put big trades on before that."

The healthcare sector .SPXHC weighed on the benchmark S&P 500 index after insurer UnitedHealth Group (UNH.N: Quote) cut its profit forecast. Mobile payments company Square (SQ.N: Quote) soared 45 percent in its highly anticipated market debut.   Continued...

Traders work on the floor of the New York Stock Exchange, November 16, 2015. REUTERS/Brendan McDermid