Banks, insurers and other financial companies led U.S. stocks slightly higher in afternoon trading Tuesday, adding to modest gains from the day before. Technology stocks also helped lift the market, while health care companies lagged the most. Crude oil prices headed lower, giving up early gains.
KEEPING SCORE: The Standard & Poor’s 500 index rose 2 points, or 0.1 percent, to 2,506 as of 1:31 p.m. Eastern Time. The Dow Jones industrial average gained 41 points, or 0.1 percent, to 22,372. Both indexes closed at record highs on Monday. The Nasdaq composite added 4 points, or 0.1 percent, to 6,459. The Russell 2000 index of smaller-company stocks was down less than 1 point to 1,440.
THE QUOTE: “People are still, as they usually are the day before a Fed announcement, kind of in a wait-and-see mode,” said Lindsey Bell, investment strategist at CFRA Research.
THE FED: Investors have their eye on the Federal Reserve, which was holding a two-day meeting of its policymakers. The panel was expected to deliver an update on the Fed’s view of the economy Wednesday. Forecasters expect the Fed to leave interest rates unchanged and stick to plans to raise rates in December. Traders will be listening for any indications that the central bank could move sooner on a rate increase and for details on the timing for when the Fed might start shrinking its multitrillion-dollar stockpile of bonds.
FINANCIALS RALLY: Speculation that the Fed will announce plans to unwind its balance sheet of bonds helped lift shares in banks and other financial companies. Such a move by the Fed would likely push long-term interest rates up. Banks benefit from higher rates, which can translate into higher profits from lending money. Wells Fargo added 74 cents, or 1.4 percent, to $53.45.