Wall Street rises on open as oil prices recover

Traders and financial professionals work on the floor of the New York Stock Exchange.
Traders and financial professionals work on the floor of the New York Stock Exchange. PHOTO: AFP

NEW YORK (REUTERS) - United States stocks were higher on Monday as oil prices bounced back from multi-week lows and investors expected the Federal Reserve to leave interest rates unchanged at its meeting this week.

Oil prices rose about 1 per cent after Venezuela said OPEC and non-OPEC producers were close to a deal to stabilize an oversupplied market.

The S&P 500 energy index rose 0.69 per cent, recouping some losses after hitting a six-week low last Wednesday.

The Fed's two-day meeting starts on Tuesday in which policymakers will debate over the US economy and its ability to absorb a rate hike. Fed Chair Janet Yellen is scheduled to conclude the meeting with a press conference at 2:00 p.m. ET (2 am Singapore time Thursday morning) on Wednesday.

Ms Yellen said last month the case for a rate increase had strengthened. But recent lackluster data, including a slowdown in jobs growth, has raised doubts about the health of the economy. "The market is resigned to the fact that the Fed won't move in September," said Matt Jones, head of US equity strategy at JP Morgan Private Bank in New York. "But some uneasiness with the Fed will be on how they talk about December."

The probability of a December move shot up to 70 per cent in the past month from 57.5 per cent in the previous month, according to a Reuters poll of over 100 economists.

The CME Group's FedWatch tool shows traders setting a 12 per cent chance of a rate hike by Wednesday, while the odds jumped to nearly 55 per cent for December.

The dollar index declined 0.38 per cent, sending gold prices higher, on dim prospects of a rate increase this week.

Investors will also keep an eye on the Bank of Japan's policy meeting on Tuesday and Wednesday, where it is largely expected to not announce further policy easing.

At 9:38 a.m. ET (9:38 p.m Singapore time), the Dow Jones industrial average was up 90.87 points, or 0.5 per cent, at 18,214.54, the S&P 500 was up 9.52 points, or 0.45 per cent, at 2,148.68 and the Nasdaq Composite was up 22.58 points, or 0.43 per cent, at 5,267.15.

Eight of the 11 major S&P 500 indexes were higher, with the materials sector rising the most by 0.72 percent. The S&P real estate index debuted on Monday with a 0.44 per cent rise.