Dollar Rises Near 4-Month High as Fed Moves Toward Raising Rates

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The dollar rose to almost a four-month high after the Federal Reserve moved a step closer to raising interest rates amid improvements in the labor market.

The Bloomberg Dollar Spot Index, which tracks the currency versus 10 of its major peers, rose 0.3 percent to 1,207.66 at 5 p.m. in New York. The gauge climbed to 1,212.78 on July 24, the highest level since March.

The dollar is up 7.7 percent this year among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

Source: Bloomberg

Oil Climbs Most in Three-Weeks After U.S. Crude Supplies Decline

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Oil advanced the most in three weeks in New York after U.S. crude stockpiles unexpectedly decreased as production and imports declined.

Inventories fell 4.2 million barrels last week, Energy Information Administration data show. An 850,000-barrel gain was forecast by analysts surveyed by Bloomberg before the report. Crude production declined to a two-month low. Imports of both crude and fuels slipped in the week ended July 24.

Crude in both New York and London entered a bear market in the past week on signs the global surplus will be prolonged as Iran bids to restore output after its nuclear accord. Leading members of OPEC are pumping oil at record levels. Concern that turmoil in China’s stock market will reduce demand in the country has weighed on commodities.

West Texas Intermediate for September delivery rose 81 cents, or 1.7 percent, to settle at $48.79 a barrel the New York Mercantile Exchange. It was the biggest gain since July 9. Prices are in a bear market after having lost more than 20 percent from their closing peak this year on June 10.

Source: Bloomberg

U.S. Stocks Gain Amid Earnings as Fed Says Jobs, Housing Improve

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U.S. stocks rallied for a second day, as earnings topped forecasts and the Federal Reserve said the labor and housing markets are improving.

The Standard & Poor’s 500 Index rose 0.7 percent to 2,108.47 at 4 p.m. in New York, after climbing above its average prices during both the past 50 and 100 days.

The labor market “continued to improve, with solid job gains and declining unemployment,” the Federal Open Market Committee said in a statement today, while also noting the housing sector “has shown additional improvement.”

Chair Janet Yellen is guiding the Fed toward its first rate increase in almost a decade as the nation approaches full employment. She has said the Fed is likely to tighten this year if the economy continues to improve as she expects, with market speculation focused on a move as soon as September.

Yellen has emphasized that the timing of rate liftoff is less important than the subsequent pace of increases, which she said would be gradual.

Greece’s debt crisis and recent turmoil in China’s stock market had raised concerns about global growth and added to speculation that the Fed may further delay a rate increase.

Earlier this month, Yellen told lawmakers that raising rates prematurely could derail the recovery. Waiting too long, on the other hand, might force the Fed to tighten at a faster pace to keep the economy from overheating.

Source: Bloomberg

U.S. Equities Advance Amid Earnings Reports Before Fed Decision

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U.S. stocks advanced, after equities’ biggest gain in two weeks, amid better-than-estimated results from Gilead Sciences Inc. to General Dynamics Corp. before the Federal Reserve’s decision on monetary policy.

Gilead gained 3.3 percent as quarterly results exceeded estimates and it raised its sales forecast. General Dynamics and Northrop Grumman Corp. jumped more than 4.7 percent after the defense contractors lifted their profit outlooks. Twitter tumbled 13 percent as its top executives struck a critical tone on user growth. Akamai Technologies Inc. lost 5.1 percent after earnings missed expectations.

The Standard & Poor’s 500 Index gained 0.5 percent to 2,103.28 at 12:10 p.m. in New York, above its average price during the past 50 days. The Dow Jones Industrial Average added 98.21 points, or 0.6 percent, to 17,728.48. The Nasdaq Composite Index rose 0.2 percent.

Investors are awaiting the Fed’s policy statement for signs on when it will move to raise borrowing costs. Economists forecast the central bank will hold rates steady in a decision at 2 p.m. in Washington. Fed Chair Janet Yellen has emphasized that the timing of rate liftoff is less important than the subsequent pace of increases, which she said would be gradual.

Source: Bloomberg

European Stocks Advance for Second Day on Earnings, M&A Boost

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European stocks had their biggest two-day gain in two weeks as companies from Bayer AG to PSA Peugeot Citroen reported better-than-estimated earnings and deals activity intensified.

Bayer and Peugeot rose more than 3.9 percent. GlaxoSmithKline Plc climbed 3.5 percent after the U.K.’s biggest drugmaker posted second-quarter profit that declined less than analysts had estimated. Barclays Plc added 1.8 percent and Numericable-SFR SAS added 3 percent as profit rose. Italcementi SpA surged 49 percent as HeidelbergCement AG said it will buy it. The German company lost 6.3 percent.

The Stoxx Europe 600 Index gained 1 percent to 394.01 at the close of trading in London. It rose for the first time in six days on Tuesday amid earnings that topped projections and takeover activity. Dealmaking is on track for the busiest third quarter on record, with volume set to surpass $1 trillion.

Quintain Estates & Development Plc jumped 22 percent after a Lone Star Funds affiliate agreed to purchase it. Solvay SA slipped 3 percent after agreeing to acquire Cytec Industries Inc. for $5.5 billion.

Source: Bloomberg