While you were sleeping: Markets edge higher

Wall Street moved higher, though some of its earlier gains were pared back because oil slid, as investors anticipated a rise in the US Federal Reserve's interest rate for the first time in nearly a decade.

The Fed will announce its rate decision at 2pm Washington time, while chairwoman Janet Yellen will speak at a at a news conference at 2.30pm.

"Far and away, the most important takeaway from the Fed meeting is its expectations of the velocity of the rate rise," New York-based Ladenberg Thalmann Asset Management chief executive Philip Blancato told Reuters.

"I know the Fed doesn't have a crystal ball, but I want to get a better expectation for how quickly it expects to raise rates."

Wall Street moved higher in midday trading. In 12.12pm trading in New York, the Dow Jones Industrial Average gained 0.2%. In 11.56am trading, the Standard & Poor's 500 Index added 0.3%, while the Nasdaq Composite Index also increased 0.3%.

"The real impact on today's decision happened in the last seven, eight days," Germany-based Guillermo Hernandez Sampere, head of trading at MPPM EK told Bloomberg.

"Investors will listen carefully to the wording from the Fed. What investors want to hear is that the US economy is in good shape and that the speed of further rate hikes will be very gradual."

The latest data showed further strength in the US housing market. Housing starts rallied 10.5% to an annualised pace of 1.17 million units in November, while building permits rose more than expected, rising 11% to a 1.29 million unit rate, the highest level since June.

Separately, industrial production slid 0.6% in November.

"The headwinds remain strong in the manufacturing sector, but the Fed right now is more focused on the strong consumer spending and housing data, which means it will go ahead with a rate hike today," Thomas Costerg, a US economist at Standard Chartered Bank in New York, told Reuters.

In the Dow, gains in shares of Verizon and those of Merck, up 1.4% and 1.2% respectively, outweighed declines in shares of DuPont and those of Apple, last trading 2.7% and 1.2% weaker.

Shares of Chevron and Exxon Mobil slid, down 1.2% and 1% respectively, with the price of oil after a US Energy Information Administration report showed crude inventories unexpectedly rose, climbing 4.8 million barrels last week.

"Only the staunchest contrarian could derive anything bullish out of that report," New York-based Liquidity Energy broker Peter Donovan told Reuters. "The actual numbers were more bearish than all expectations, as well as more bearish than the API report released last night."

In Europe, the Stoxx 600 Index ended the day with a 0.2% advance from the previous close. Germany's DAX Index rose 0.2%, while France's CAC 40 Index also increased 0.2%, and the UK's FTSE 100 Index added 0.7%.

(BusinessDesk)