Wall St opens higher after three days of losses, oil prices continue to hover near 7-year lows

A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York. PHOTO: REUTERS
A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York. PHOTO: REUTERS

NEW YORK (REUTERS) - U.S. stocks were higher at the open on Thursday, after three straight days of losses, even as oil prices continued to hover around 7-year lows and investors await a rate hike decision by the U.S. Federal Reserve.

Markets have had a bruising week so far as equities tracked oil prices. Brent futures are down more than 6 percent this week and having dipped below US$40 (S$56) per barrel there are renewed expectations it might test 2008's low.

U.S. stocks closed lower on Wednesday in a choppy session as oil resumed its decline, fuelling investor worries about global economic growth. "The market will continue to watch oil carefully and we can expect a mixed to positive session if we don't see any wild swings in oil prices like we did yesterday," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"Investors are awaiting Fed's decision, and there has been some portfolio repositioning ahead of the meeting and that's one reason the market has been erratic."

The central bank meets on Dec. 15-16, when it is expected to raise rates for the first time in nearly a decade.

Traders are pricing in an 85 percent chance of a rate hike next week, according to the CME Group's FedWatch.

At 9:44 a.m. ET (10.44 pm Singapore time) the Dow Jones industrial average was up 45.37 points, or 0.26 percent, at 17,537.67, the S&P 500 was up 6.27 points, or 0.31 percent, at 2,053.89 and the Nasdaq Composite was up 18.17 points, or 0.36 percent, at 5,041.04.

Microsoft's 0.5 per cent rise was the biggest boost on the S&P and the Nasdaq.

Eight of the 10 major S&P 500 sectors were higher with the health index's 0.50 per cent rise leading the advancers.

Data showed the number of Americans filing for unemployment benefits rose to a five-month high of 282,000 last week, but likely does not signal a deterioration in the labor market as the underlying trend remained consistent with tightening conditions.