(Bloomberg) -- U.S. stocks rose for the first time in four days, while the dollar strengthened amid a recommendation to buy the currency a week before the Federal Reserve is anticipated to raise interest rates.
The Standard & Poor’s 500 Index climbed above its average price for the past 50 days as it seeks to halt a slide that erased 2 percent since last week’s payrolls data hardened the consensus on Wall Street for a Fed rate hike. The dollar hovered near the highest in a decade as Citigroup Inc. called the greenback “attractive.” Crude sank below $37 a barrel for a fifth day of losses.
“We’re in a waiting period here ahead of the Fed meeting,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “Energy has been the most volatile sector in a broader market over the last couple weeks and U.S. equities seem to be tracking it. We bounced back off yesterday’s lows and today we’re right at the lows for December, and that area is holding.”
The Fed meeting is expected to confirm that Chair Janet Yellen believes the world’s biggest economy is strong enough to cope with the first increase in borrowing costs since 2006. Still, investors are caught between optimism about U.S, growth and concern that a slowdown in China and the consequent tumble in commodities will damp global growth prospects. Oil’s slump since OPEC’s decision to effectively abandon its production target has unsettled global financial markets.
The S&P 500 rose 0.5 percent at 1 p.m. in New York, with gains faltering at the 200-day moving average. The gauge is little changed for the year after closing Wednesday 3.9 percent away from its all-time high set in May. It climbed within 1.4 percent of the record last week.
Energy shares paced gains, though the group cut a 2.2 percent advance in half in afternoon trading. Materials producers fell 1.2 percent for the biggest contribution to losses, as DuPont Co. and Dow Chemical Co. gave back some of Wednesday’s gains.
“There’s been a lot of positioning ahead of the Fed with people taking down exposure ahead of a likely rate increase,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “We continue to be in a trading range, we’re at the low end of that range.”
A report tomorrow on retail sales and producer prices will probably show stronger growth for November, according to economists surveyed by Bloomberg. The data aren’t expected to impact the Fed’s decision, with traders pricing in an 80 percent chance that the rates will rise on Dec. 16.
The Stoxx Europe 600 Index fell 0.3 percent for a third day of losses as a rally in commodity producers failed to lift sentiment. The region’s shares earlier extended their lowest levels since Oct. 21 as most industry groups declined.