US open: Markets higher as investors mull Fed rate hike

US stocks were on the front foot on Thursday as investors mulled the second interest rate hike by the Federal Reserve in a decade, while a stack of data was released.

The Dow Jones Industrial Average was up 0.52% to 19,895.54, the S&P 500 increased 0.51% to 2,264.66, and the Nasdaq gained 0.48% to 5,462.54 at 1526 GMT.

The Fed unanimously raised rates by 25 basis points to a target range between 0.50% and 0.75% and expects further three hikes next year. It also approved a 0.25% increase in the discount, or primary credit, rate to 1.25% from 1%.

Elsewhere, the Bank of England left interest rates on hold at 0.25%, but warned that the reserve bank could respond in either direction to the risks around inflation and growth next year.

Connor Campbell, financial analyst at Spreadex, said: “The dollar only looked more juiced-up this afternoon, the currency continuing to bully its global peers following the Fed’s rate hike last night.

“Despite the rampant performance of the dollar the Dow Jones is eyeing a fresh all-time high, climbing around 100 points this Thursday to once again cross the 19,900 mark. The index took the briefest of pauses following the Fed’s hawkish statement, but is already back on track to hit 20,000 before the year is out.”

The dollar was up 1.05% to 118.27 against the yen, rose 1% to 0.9586 versus the euro, and was higher by 0.65% to 0.8011 versus sterling.

Meanwhile, oil prices retreated as Brent crude fell 0.69% higher at $53.53 a barrel and West Texas Intermediate was lower by 1.37% to $50.35 at 1441 GMT.

Gold on Comex was dropped 2.77% to 1,131.50 per troy ounce.

On the data front, the consumer price index edged up 0.2% on November as expected, from the 0.4% rise in the previous month.

In the 12 months to November the index increased 1.7%, also as anticipated, from 1.6% in October.

Initial jobless claims fell 4,000 to a seasonally adjusted 254,000 in the week ended 10 December, slightly below the 256,000 expected, while continuing unemployment claims rose by 11,000 to 2.02m in the week ended 3 December.

Employers added 178,000 jobs in November, roughly in line with average monthly increase this year.

The current account balance dropped to $113bn in November from $118.3bn the previous month, and more than the $11.6bn forecast.

The Empire State manufacturing index jumped to a reading of nine in December, higher than the four expected and more than the 1.5 last month. While the Philadelphia Fed index soared to 21.5 in December form 7.9 in November and significantly more than the 9.1 forecast.

The NAHB housing market index rose to a nine-year high to 70 in December, from 63 the prior month, and beat expectations of 64.

In corporate news, Yahoo was weaker by 3.45% after the technology company said that more than one billion user accounts may have been affected by a 2013 hack.

Mondelez shares were up 3.83% following a report late on Wednesday that Kraft Heinz is planning to acquire the company. However, there were also reports that the two are not currently in deal talks. Kraft Heinz shares were also 0.95% higher.