US stocks were slightly higher as they attempted to recover from selloff with investors still focusing on when the Federal Reserve would revise its lending rates.
All the major indexes had recorded sharp declines on Tuesday, the biggest one day percentage decline in two months for the S&P 500, surpassing a similar selloff on Friday as talk of the Fed Reserve raising the rates as soon as June abound.
“Investors aren’t sure how much to worry about the Fed [possibly] starting to raise short-term interest rates sooner than they previously expected,” Kate Warne, investment strategist at Edward Jones, told the Wall Street Journal.
“We’ll continue to see a choppy market in this environment”
The stocks opened slightly higher partially rebounding from the previous session’s losses but continually lost ground as oil prices continued to plummet. Crude prices tumbled 1.4% in mid morning trading after previously rising by as much as 1.6%.
The Dow Jones Industrial Average grew by 45 points or 0.3% to 17708 while the S&P advanced 3 points or about two tenths to 2047. The Nasdaq Composite grew 7 points 0.2% to 4867.
The widespread concerns over the rates rise spurred the US dollar to a 12 year peak against the euro with the US dollar index remaining at a moderately high 0.9% on Wednesday.
The dollar index .DXY has grown in five of the last six sessions amidst concerns that it would continue to grow against other currencies weighing on US’s multinational earnings.
“The reason the Fed would raise rates is because growth dynamics are picking up, which would ultimately be a tailwind for markets, though markets will likely challenge that view with volatility,” Jeremy Zirin, chief equity strategist of wealth management at UBS in New York, told Reuters.
“We remain constructive that equities will grind higher over the course of 2015, but there will be some volatility based on any changes to the view of when the Fed will announce its first rate hike.”
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