U.S. stock indexes inch higher ahead of Fed announcement

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U.S. stock indexes inch higher ahead of Fed announcement

The major USA index futures are pointing to a higher opening on Monday, with stocks poised to extend the upward move seen last week.

Markets overseas were mixed Wednesday.

However, the Dow still clocked a closing record for the fifth day in a row while the S&P had a closing record for the second consecutive session.

The major averages all finished the day in positive territory. The Standard & Poor's 500 index inched up 0.1 percent to 2,508.24 and the Dow Jones industrial average rose 0.2 percent to 22,412.59. Over the past 12 months, USA home sales have risen only 0.2 percent.

On the other hand, gold stocks fell sharply following the Fed announcement, dragging the NYSE Arca Gold Bugs Index down by 1.9 percent. Ex-auto sales had been expected to increase by 0.5 percent. Import prices excluding oil rose 0.3% in August after declining 0.1% in July.

The Fed said Hurricane Harvey is estimated to have reduced the rate of change in total output by roughly three-quarters of a percentage point. That isn't expected to improve next month either when the force of the impact from Hurricanes Harvey and Irma weighs on housing starts activity.

So since hitting a low on August 17, the S&P 500 energy sector has risen almost 8% and is the best performing sector so far this month. The index moved higher for the fifth straight day after hitting its lowest closing level in over a year last Friday. Income-seeking investors find those stocks less appealing when bond yields move higher.

Wall Street moved higher, paring some gains after rallying to record highs amid optimism about the United States economic outlook and corporate profits, as investors eyed a meeting by the Federal Reserve which is set to tighten monetary policy.

In Europe the Stoxx 600 Index ended the session with an advance of 0.3 percent from the previous close from the previous close. Hong Kong's Hang Seng index slipped 0.1 percent to 28,072.92 and the Shanghai Composite in mainland China dipped 0.1 percent to 3,361.72.

Australian shares eked out modest gains after major US indexes hit record highs on Friday.

The consumer staples sector.SPLRCS fell 0.9 percent while the utilities sector.SPLRCU ended 0.8 percent lower.

Shares of the major banks Bank of America, Morgan Stanley and Citigroup were up more than 1 percent. The stock was the biggest percentage loser on the S&P technology index.

Traders work on the floor of the New York Stock Exchange in New York. The cereal maker slid $3.21, or 5.8 percent, to $52.17. Japanese markets were closed for a holiday. Seoul shares hit over six-week high after reports that Samsung Electronics and SK Hynix will make a profit of 47 trillion to 48 trillion won (US$41.5 billion to 42.38 billion) in the semiconductor sector this year. "The unwinding of the balance sheet will dominate markets for at least the next two years and cements our outlook for higher rates", said Bryce Doty, senior portfolio manager at SIT Investments, which manages some $7 billion.

Easing of geopolitical tension and fading expectations for Fed tightening this year also supported underlying sentiment.

Last week, the S&P 500 had weekly gains of 1.6%, its best since the first week of January while the more narrower Dow jumped 2.2% for its best week since early last December. France's CAC 40 Index increased 0.3 percent, Germany's DAX Index added 0.3 percent, while the UK's FTSE 100 Index climbed 0.5 percent. The stock lost $6.64, or 4.2 percent, to $149.96.

In economic releases, Eurozone inflation climbed to a four-month high in August, as initially estimated, final data from Eurostat showed today. This was the highest since April and in line with the estimate published on August 31.

Persistently weak readings of inflation that have remained below the Fed's 2 percent target rate have been a concern for policymakers.

Investor focus will shift to the Federal Open Market Committee's two-day meeting, which starts on Tuesday.

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