By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch
Renewed terror fears rattled European markets
Stocks posted gains Wednesday as investors assessed mixed data
on the U.S. housing market and hawkish comments from Federal
Reserve officials ahead of the release of the minutes from the
Fed's most recent meeting.
Details from the October policy-setting meeting, set to be
released at 2 p.m. Eastern Time, could solidify expectations for an
interest-rate increase at the central bank's December
gathering.
"Bearing in mind that these minutes were recorded prior to the
fairly stellar jobs number in October, one could expect that any
perceived hawkishness will effectively be taken as a green light
for a rate hike in December," said Brenda Kelly, head analyst at
London Capital Group, in a note.
The Dow Jones Industrial Average rose 110 points, or 0.6%, to
17,600, while the S&P 500 index was up 13 points, or 0.6%, at
2,063. The Nasdaq Composite Index rose 27 points, or 0.5%, to
5,013.
Construction on new homes declined by 11% in October, the
Commerce Department said Wednesday, to the lowest level since the
early spring
(http://www.marketwatch.com/story/housing-starts-fall-11-in-october-but-permits-rebound-2015-11-18).
But permits for single-family homes, which account for about
three-quarters of the housing market, rose 2to their highest level
since the end of 2007.
Meanwhile, three Fed officials said Wednesday that they support
a rate increase
(http://www.marketwatch.com/story/three-fed-officials-back-an-interest-rate-hike-soon-2015-11-18),
fueling more speculation that the Fed will raise interest rates
next month for the first time in nearly a decade.
Stocks also got a boost from the potential merger between
Canadian Pacific and U.S. railroad Norfolk Southern
(http://www.marketwatch.com/story/norfolk-southern-reveals-low-premium-bid-from-canadian-pacific-2015-11-17),
the latest possible deal after France's Air Liquide agreed Tuesday
to purchase Airgas, Inc. (ARG).
These potential mergers, along with the big brewery deals
announced last week, could have broader significance for the
market, analysts said.
"It seems that growth prospects in mature industries have slowed
to the point that many companies are finding the only growth avenue
left is to gobble up their competitors," said Colin Cieszynski,
chief market strategist at CMC Markets, in a note.
But the fact that many of the buyers in recent mega transactions
are strategic, namely other companies in the industry, rather than
financial, such as hedge funds and private-equity firms, means that
"many management teams are still seeing value out there,"
Cieszynski added.
Earlier on Wednesday morning, investor sentiment weakened after
a police raid on a Paris apartment linked to last week's terror
attacks.
European stocks
(http://www.marketwatch.com/story/uropean-stocks-fall-as-manhunt-for-terrorists-grips-paris-2015-11-18)
(http://www.marketwatch.com/story/uropean-stocks-fall-as-manhunt-for-terrorists-grips-paris-2015-11-18)fell,
with travel shares under pressure after the raid in a northern
Paris suburb
(http://www.marketwatch.com/story/at-least-2-dead-as-police-raid-paris-suburb-in-hunt-for-suspected-mastermind-2015-11-18)
left two dead and injured several police. Meanwhile, two Air France
planes headed to Paris from the U.S. were diverted over security
threats Tuesday evening
(http://www.marketwatch.com/story/two-air-france-flights-bound-for-paris-diverted-after-security-threats-2015-11-18).
U.S. stocks finished flat on Tuesday (), as strong results from
retailers such as Wal-Mart Stores Inc. were unable to keep the
market elevated as oil prices fell and terror fears rattled
investors.
Fed minutes, data: Caution for investors was setting in ahead of
minutes due from an October Fed meeting. Meanwhile, Dallas Fed
President Rob Kaplan will give a speech on economic conditions and
Fed policy at the University of Houston at noon Eastern.
Stocks to watch: Shares of Norfolk Southern Corp.(NSC) surged
5.5% after the proposed merger.
Citrix Systems, Inc.(CTXS) shares fell 7% after the company
announced it will spin off its GoTo products into a separate,
publicly-traded company.
Apple, Inc. (AAPL) shares rose 3.2% after Goldman Sachs added
the iPhone maker to its "conviction buy list" Wednesday
morning.
Staples Inc. (SPLS) slid 1.8% as quarterly sales missed Wall
Street's target,
(http://www.marketwatch.com/story/staples-quarterly-sales-miss-wall-streets-mark-2015-11-18)
while Target Corp. (TGT) shares fell 3.2% following third-quarter
results that missed.
After the close, Keurig Green Mountain Inc. (GMCR) and
Salesforce.com (CRM) are among those expected to report.
Airlines could be active, with Air France-KLM SA(AF.FR) down 1%
in Paris on news of two U.S. planes diverted en route to the French
capital and Delta Air Lines, Inc. (DAL) down 1%.
Other markets: Alongside weakness for European stocks, most
Asian markets didn't have an upbeat day, with the Shanghai
Composite Index dropping 1% and the Nikkei 225 index finishing
flat.
The dollar
(http://www.marketwatch.com/story/us-dollar-mostly-keeps-its-strength-with-fed-minutes-in-focus-2015-11-18)
struggled to move much higher against major rivals as Fed minutes
loomed. Oil prices
(http://www.marketwatch.com/story/oil-prices-rise-but-analysts-say-fundamentals-stay-bearish-2015-11-18)
rose, up around 56 cents to $41.23 a barrel, rebounding from
selling pressure on Tuesday after API inventories fell,
(http://www.marketwatch.com/story/oil-prices-rise-but-analysts-say-fundamentals-stay-bearish-2015-11-18)easing
some of the recent fears of a supply glut. Oil could be active
through the day with traders looking to the midmorning DOE report
for confirmation of rejection of the improvement.
Gold remained under pressure.
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(END) Dow Jones Newswires
November 18, 2015 10:13 ET (15:13 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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