US close: Wall Street moves sharply higher despite possibility of December rate hike

Stocks jumped sharply following the release of the minutes of the US central bank's last policy meeting, despite the fact that it left the possibility of a December rate hike wide open.

The summary of US rate-setters' debate about whether or not raise rates in October had a less hawkish bias, leaving the door open to a tightening of monetary policy in December but seemed to imply a shallower path of rate rises thereafter as well.

"The minutes suggest that the committee remains divided. However, since the time of the October meeting, we see them as having reached a broad consensus on a December rate hike," economists at Barclays said following the release of the minutes.

Indeed, before the release of the minutes three Fed speakers seemed to drop heavy hints that their preference was to raise rates come December.

The Dow Jones Industrial finished the session 1.42% or 247.66 points up at 17,737.16, while the S&P 500 gained 1.62% or 33.14 points to stand at 2,083.58 by the end of trading.

“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,” Brenda Kelly, head analyst at London Capital Group, had said before the report.

By sectors, the largest gains were seen in the following industrial groups: coal (7.66%), Non-ferrous metals (4.53%) and Gold (4.29%).

The Chicago Board of Trade's Volatility index (VIX) dropped 10.56% to 16.85.

Housing starts decline

According to the Commerce Department, housing starts fell 11% last month to 1.06m, against expectations for a reading of 1.16m.

As well, housing starts figures for September were revised down from an annual rate of 1.21m to 1.19m.

However, permits for new construction, which are a closely-followed gauge of future demand, rebounded 4.1% to an annual rate of 1.15m, while permits for single-family homes rose 2.4% to 711,000, the highest level since the end of 2007.

The Mortgage Bankers Association said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, climbed 6.2% in the week ended 13 November.

Goldman backs Apple

Target slid 4.29% despite reporting better-than-expected third quarter sales and lifting its full year guidance, while Staples slid 2.39% after its sales fell short of estimates.

Home Depot surrendered 0.29%, even though analysts at RBC Capital lifted their target price on the stock from $137 to $140, while Apple gained 3.17% after analysts at Goldman Sachs added the stock to their conviction buy list
Keurig Green Mountain and Salesforce.com are among those reporting after the market close.

Elsewhere, Asian equity markets endured a mixed session, as investors remained edgy ahead of the release of the minutes from the latest Fed meeting, while European stocks lost ground.

Front month West Texas crude futures finished the session 36 cents lower at $40.75 per barrel after dipping below the $40 mark at one point in the session.

Market Movers

FTSE 100 (UKX) 6,278.97 0.16%
FTSE 250 (MCX) 17,089.09 0.03%
techMARK (TASX) 3,148.55 0.10%

FTSE 100 - Risers

Antofagasta (ANTO) 500.00p 5.84%
Glencore (GLEN) 93.31p 5.04%
Hikma Pharmaceuticals (HIK) 2,048.00p 4.86%
Anglo American (AAL) 449.45p 4.28%
Pearson (PSON) 812.00p 2.92%
Coca-Cola HBC AG (CDI) (CCH) 1,599.00p 2.83%
Fresnillo (FRES) 689.00p 2.75%
Rio Tinto (RIO) 2,260.50p 2.10%
Sainsbury (J) (SBRY) 253.60p 2.09%
Aberdeen Asset Management (ADN) 337.20p 1.72%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 573.00p -3.13%
Smiths Group (SMIN) 989.50p -2.99%
Rolls-Royce Holdings (RR.) 542.50p -2.16%
InterContinental Hotels Group (IHG) 2,465.00p -1.40%
Carnival (CCL) 3,400.00p -1.39%
Dixons Carphone (DC.) 460.00p -1.33%
CRH (CRH) 1,778.00p -1.28%
Prudential (PRU) 1,495.00p -1.22%
BT Group (BT.A) 487.25p -1.15%
British Land Company (BLND) 829.00p -1.13%

FTSE 250 - Risers

Hunting (HTG) 348.00p 10.48%
Petra Diamonds Ltd.(DI) (PDL) 57.95p 7.31%
Essentra (ESNT) 848.50p 5.34%
Evraz (EVR) 84.65p 5.29%
B&M European Value Retail S.A. (DI) (BME) 322.40p 4.68%
BBA Aviation (BBA) 197.90p 4.21%
Polymetal International (POLY) 579.50p 3.67%
Tullow Oil (TLW) 202.30p 3.16%
Enterprise Inns (ETI) 104.00p 2.87%
Wood Group (John) (WG.) 568.00p 2.62%

FTSE 250 - Fallers

esure Group (ESUR) 240.80p -4.42%
Drax Group (DRX) 217.10p -4.15%
Entertainment One Limited (ETO) 222.20p -3.35%
Spire Healthcare Group (SPI) 300.80p -2.46%
Centamin (DI) (CEY) 59.90p -2.44%
Bwin.party Digital Entertainment (BPTY) 106.90p -2.29%
Allied Minds (ALM) 440.40p -2.18%
Renishaw (RSW) 1,840.00p -2.13%
Just Eat (JE.) 414.00p -2.04%
Halfords Group (HFD) 385.80p -2.03%