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Midday Update: Stocks Rally on Rebound in Oil; Inflation Data Supports Interest Rate Increase

Wall Street has been adding generously to Monday's late-session advance, with a rebound in crude oil prices and bullish inflation data today carrying the Nasdaq Composite Index back above its 5,000-point threshold and lifting the Dow Jones Industrial Average nearly 200 points higher.

All 10 sectors of the S&P 500 were on the plus side Tuesday, led by gains for the energy and financial sectors, with banking stocks appreciating on almost universal expectations the Federal Reserve will raise U.S. interest rates tomorrow for the first time in nearly a decade.

Economic data today was supportive of a higher interest rates, with the annual consumer price index last month reaching the Fed's 2.0% target rate for the first time in over three years. Excluding food and fuel, consumer prices rose an as-expected 0.2% during November.

The Empire State manufacturing index improved to negative 4.59 reading from negative 10.74 in December, beating the consensus view looking for a negative 7.0 reading this month. Readings under zero indicate contraction, where the index has lingered for five months.

Also today, the homebuilders' housing market index dropped a point this month to a 61 reading from November's 62, missing expectations for an 1-point increase to 63.

Equity markets across Europe all finished significantly higher Tuesday, with France and Germany outperforming following gains in oil, commodity and banking stocks. EU-zone economic data today beat expectations, with the ZEW index measuring current economic conditions and sentiment rising during December.

Crude oil was up 85 cents to $37.16 per barrel. Natural gas was down 7 cents to $1.95 per 1 million BTU. Gold was down $2.50 to $1,060.90 per ounce, while silver was down a penny to $13.69 per ounce. Copper was down 6 cents to $2.06 per pound.

Among energy ETFs, the United States Oil Fund was up 2.24% to $11.41 with the United States Natural Gas Fund was down 3.51% to $7.15. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 0.37% to 13.61 while SPDR Gold Shares were down 0.18% to $101.61. The iShares Silver Trust was up 0.08% to $13.08.

Here's where the U.S. markets stood at mid-day:

NYSE Composite Index up 125.32 (+1.25%) to 10,112.08

Dow Jones Industrial Average up 252.68 (+1.45%) to 17,621.18

S&P 500 up 31.08 (+1.54%) to 2,053.02

Nasdaq Composite Index up 72.45 (+1.46%) to 5,024.68

GLOBAL SENTIMENT

Nikkei 225 Index down 1.68%

Hang Seng Index down 0.17%

Shanghai China Composite Index down 0.29%

FTSE 100 Index up 2.45%

CAC 40 up 3.16%

DAX up 3.07%

NYSE SECTOR INDICES

NYSE Energy Sector Index up 2.33%

NYSE Financial Sector Index up 1.68%

NYSE Healthcare Sector Index up 1.41%

UPSIDE MOVERS

(+) KTOV (+29.14%) Phase 3 trial of its KIT-302 to reduce hypertension met the primary efficacy endpoint

(+) LL (+25.46%) Hedge fund manager Whitney Tilson covered his $2.3 million short position

(+) VRX (+16.36%) Announced a deal with Walgreens Boots Alliance ( WBA )

(+) SIRI (+3.00%) Signed a new 12-year deal with Howard Stern on SiriusXM

DOWNSIDE MOVERS

(-) NEOT (-80.22%) Its LIPO-202 top line Phase 3 trial did not meet co-primary composite and secondary endpoints

(-) BPMX (-22.38%) Beats Q3 EPS estimates, but revenue only met expectations

(-) KMT (-13.96%) Lowered 2016 profit and revenue estimates

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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