Dow hits record high at the open as Fed decision looms

Oil prices bounced back and at 7.15am AEST, West Texas Crude oil had risen to $US46.05 a barrel, the price of a barrel of Tapis had increased to $US48.22, while spot gold had edged down to $US1,265.02 an ounce. Visa Inc. (NYSE: V), a credit card that is listed under software and services, rose 1.7%. All big tech stocks declined, with Apple losing 2.5 percent, Netflix dropping 4.2 percent, and Facebook sliding 0.8 percent.

The Fed is largely expected to raise interest rates by 25 basis points, but investors will likely key on what the central bank says about US inflationary pressures.

The Dow Jones Industrial Average gained 92.80 points, or 0.4%, to close at 21,328.47.

Apple shares added to last week's drop on Monday to lead a market downturn as tech, still the best performing S&P 500 sector this year, succumbed under its own weight.

The tech-heavy Nasdaq Composite index posted its biggest two-day slide since December, ending down 0.5 percent.

At the same time, energy shares added to Friday's gains, suggesting that investors were seeking value.

In the foreign exchange market, the dollar index slipped 0.1 percent, with losses limited by investor expectations the Fed will increase U.S. interest rates this week while other central banks, including the Bank of England and Bank of Japan, are likely to remain on hold. The stock's 52-week range is $1.19 to $5.22.

The S&P 500 technology sector .SPLRCT rose 0.5 percent, leading gainers among the 11 major S&P indexes, recovering from its biggest two-day decline in almost a year on Monday.

Technology stocks have easily outperformed this year, with the S&P information technology sector advancing 17.6 percent.

The Dow and S&P 500 closed at record highs.

Despite the flailing leadership in tech stocks, Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin, said he is not too anxious about it becoming a broader market selloff.

The Nasdaq 100 has dropped 3.2% since Friday, its biggest two-day decline in nearly a year.

"With some of the losses that those stocks have suffered, investors are coming in and looking at getting those stocks cheaper, so I think that's why you are seeing the market up today", said Bill Lynch, director of investment at Hinsdale Associates.

The Standard & Poor's 500 index rose 6 points, or 0.3 percent, to 2,435. On the Nasdaq, 1,603 issues rose and 1,056 fell.

About 7.89 billion shares changed hands in US exchanges, far above the 6.81 billion daily average over the last 20 sessions.

  • Carolyn Briggs