U.S. stocks notched their best day in nearly four weeks Wednesday as investors welcomed new hints pointing to a Federal Reserve interest rate hike in coming weeks. Traders were also encouraged by more corporate deal news.
The rally pushed the Standard & Poor’s 500 index back into positive territory for the year.
ConAgra Foods jumped 4 percent on news the company is spinning off its frozen potatoes business. Railroad operator Norfolk Southern rose 6 percent after receiving an unsolicited takeover offer by Canadian Pacific.
Stocks in financial companies, which tend to benefit from rising interest rates, were among the biggest gainers after traders digested the minutes from the Fed’s October policy meeting.
“The market today is just reinforcing the view that most likely the Fed is going to move in December, and that’s not necessarily a bad thing for either the economy (or the stock market),” said Jeremy Zirin, chief equities strategist at UBS Wealth Management Americas.
The Dow Jones industrial average rose 247.66 points, or 1.42 percent, to 17,737.16. The Standard & Poor’s 500 index gained 33.14 points, or 1.6 percent, to 2,083.58. That’s the S&P 500’s best gain since Oct. 22. The Nasdaq composite added 89.19 points, or 1.8 percent, to 5,075.20.
Major stock indexes headed higher as trading got going early Wednesday and maintained the momentum throughout the day. The government’s latest tally of U.S. home construction didn’t slow the rally, despite delivering news that builders broke ground on fewer houses and apartments in October.
Not all stocks had a good day. Target slumped 4.3 percent after the retailer reported that its sales at established locations increased in the third quarter at a slower rate than in the previous quarter. The stock shed $3.13 to $69.78.
Benchmark U.S. crude rose 8 cents to close at $40.75 a barrel on the New York Mercantile Exchange. It briefly dipped below $40 a barrel for the first time since August. Brent crude, used to price international oils, rose 57 cents to close at $44.14 a barrel in London.
