DAL Delta Air Lines Inc

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)

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