US stocks jump on Fed signal of rate hike but terror fears weigh in Europe

In this July 24, 2013, file photo, specialists work at the Barclays post on the floor of the New York Stock Exchange just after the closing bell in New York.
In this July 24, 2013, file photo, specialists work at the Barclays post on the floor of the New York Stock Exchange just after the closing bell in New York. PHOTO: AFP

NEW YORK (AFP) - Wall Street stocks marched higher on Wednesday (Nov 19), greeting US Federal Reserve meeting minutes that suggested a likely interest rate increase in December based on greater confidence in the economy.

Minutes from the Fed's Oct 27-28 monetary policy meeting showed most officials expect a rate hike in December and have moved past worries about slowing global growth that had prevented a hike in September.

"The Fed continues to signal it will raise rates in December and the market sees this as a vote of confidence in the economy after the turbulence at the end of the summer," said Mr Gregori Volokhine, president of Meeschaert Capital Markets.

But the upbeat session in New York, which ended with the S&P 500 advancing 1.6 per cent, contrasted with hesitant trading in Europe, where investors were rattled by a massive police raid in the northern Paris suburb of Saint-Denis targeting suspects in last week's deadly attacks in the French capital.

That came after a bomb threat on Tuesday forced Germany's football friendly against the Netherlands to be cancelled.

German Chancellor Angela Merkel, who was to attend the event, was rushed back to Berlin, and thousands of fans had to be evacuated from the stadium. No explosives were found.

"From a market's standpoint, it's unnerving to see public events like football matches being cancelled because of the threat of terrorism," said market analyst Jasper Lawler at CMC Markets in London.

Paris stocks finished down 0.6 per cent, while Frankfurt stocks ended a volatile session with a small loss. London managed a small gain thanks to a rebound in mining shares.

The US dollar retreated a bit against the euro, a move that some analysts attributed to profit taking following the greenback's rise to a seven-month high on Tuesday.

In New York, Apple shot up 3.0 per cent after Goldman Sachs added the consumer technology powerhouse to its "conviction buy" list, writing that the addition of services such as TV, music and payments services provides Apple with "a significant multi-year opportunity" to further monetise its iPhones.

Shares of large banks gained on expectations of increased profits from higher interest rates. JPMorgan Chase rose 2.0 per cent, Citigroup 2.8 per cent and Bank of America 2.4 per cent.

Chipmaker Qualcomm slumped 9.4 per cent after disclosing that it faces allegations from the Korean Fair Trade Commission that its licensing practices violate Korean competition law, triggering monetary penalties. Qualcomm said it intends to "vigorously" defend itself against the charges.