Stocks Extend Gains Ahead of Rate Decision, Oil Advances

Barry Adams
14 Dec, 2022
New York City

Stocks on Wall Street gained ahead of the closely watched rate decision later in the day. 

Investors are anticipating a less hawkish stance from the Federal Reserve after four large-size rate hikes in a row. 

Despite the multiple rate hikes, inflation is still elevated and significantly above the Fed's preferred rate of 2.0%. 

Investors are also hoping to get more clarity on the Fed's stance on future rate hikes and policy makers' views on the health of the economy. 

 

Market Indexes Advance 

Market indexes on Wall Street traded higher on the expectations of a rate hike moderation. 

Tech and energy stocks led the gainers in trading. 

The S&P 500 index increased 0.6% to 4,045.14 and the Nasdaq Composite index added 0.6% to 11,323.07. 

 

Energy Prices Advance 

Energy prices continued to rebound in New York, Europe and Asia. 

Crude oil prices rose amid optimism about China's reopening and above average winter conditions in the U.S. and colder temperatures in Northern Europe.  

Crude oil increased $1.25 to $76.62 a barrel and natural gas prices eased 35 cents to $6.59 a thermal unit. 

 

Bond Yields Inch Higher 

Treasury bond yields edged higher ahead of the last rate decision from the Federal Reserve. 

The U.S. Fed is expected to increase rates at least by 50 basis points and investors are already looking ahead in 2023 and hoping that the Fed may pause rate hikes at its first meeting in 2023 in February. 

The yield on 2-year Treasury notes eased to 4.19%, 10-year Treasury notes inched higher to 3.51% and 30-year Treasury bonds edged higher to 3.54%. 

 

Import and Export Price Indexes Eased In October 

U.S. import prices declined 0.6% in November and export prices eased 0.3% from the previous month, the fifth monthly fall in prices in a row, the U.S. Bureau of Labor Statistics said Wednesday.

The import price index for October was revised to a 0.4% decline. 

The import prices fell after the cost of petroleum decreased 2.8% in November and non-fuel import prices declined 0.4% in the month, the largest decline since July.   

On an annual basis, import prices inflation eased to 2.7%, the smallest increase since January 2021.  

 

Mortgage Applications Rebound 

Mortgage applications rebounded 3.2% in the week ending on December 8, according to the latest survey results released by the Mortgage Bankers Association. 

The seasonally adjusted Market Composite Index increased 3.2% from the previous week and rose 0.4% on an unadjusted basis. 

The refinancing index increased 3% from the previous week but was still down a whopping 85% from a year ago. 

 

U.S. Stock Movers 

Delta Air Lines, Inc gained 2.9% to $34.34 after the company said demand for air travel remains strong and lifted its annual views. 

For 2022, the airline estimated revenue between $45.5 billion and $45.6 billion and earnings per share between $3.07 and $3.12.

The company also estimated 2023 revenue to increase between 15% and 20% and earnings per share to fall between $5.0 and $6.05 and free cash flow to surpass  $2.0 billion. 

Aspen Group Inc increased 32% to 46 cents after the online education company reported better-than-expected quarterly results. 

Revenue in the fiscal year second quarter 2023 ending in October declined to $17.1 million from $18.9 million a year ago. 

Net loss in the quarter shrank to $2.3 million from $2.9 million or diluted loss per share fell to 9 cents from 11 cents a year ago.