U.S. stocks and exchange traded funds (ETFs) opened in positive territory piggy-backing on a rebound in global markets and commodities, as well as anticipation of the outcome of a two-day Fed meeting.
As the dollar continues to weaken, commodities such as oil and gold have rebounded from yesterday’s declines, further boosting energy and materials stocks. The Vanguard Energy ETF (NYSEArca: VDE) was up 1.5% in morning trading.
The Federal Reserve is meeting today and assessing the overall health of the economy to determine whether they will keep interest rates at a record low of close to 0%. Additionally, investors are hoping to get some indication as to when the Fed plans on hiking rates.
In the financial sector, the Federal Deposit Insurance Corp. (FDIC) may ask healthy banks to lend billions of dollars to restore the depleted fund that safeguards bank deposits. The proposal has gathered strong support across the board and is seen as a more attractive alternative to tapping the $500 billion line of credit with the U.S. Treasury, reports Biswarup Gooptu of Reuters. The Financial Select SPDR (NYSEArca: XLF) was up 1% in morning trading.
In the earnings arena, auto dealership CarMax (NYSE: KMX) reported stellar second-quarter results on higher sales and a one-time gain related to its auto financing division. The Virgina-based company reported an increase in sales of 13% from the previous year and profits of $0.46/share, much higher than the $0.18/share expected by analysts. The news helped the SPDR S&P Retail (NYSEArca: XRT) add nearly 0.8% in morning trading.
Overall, all three major U.S. indexes are up in morning trading with the Dow Jones Industrial Average up 0.3%, the S&P 500 adding 0.6% and the Nasdaq up 0.3%.
For more stories on energy, visit our energy category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.