While you were sleeping: Wall St rallies as Fed gathers

Wall Street gained, sending the Dow and the S&P 500 to record highs, as investors prepared for the Federal Reserve's third interest rate increase this year, widely expected to be announced on Wednesday.

To be sure, the Nasdaq Composite Index slipped.

At the close of trading in New York, the Dow Jones Industrial Average was up 118.77, or 0.5%, to 24,504.80. The Standard & Poor's 500 Index rose 0.15% to 2664.11, while the Nasdaq was off 0.2% at 6862.32.

"You're going to see rotation when you go into the end of the year," Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, told Reuters.

"Some of the profits were taken off the table for big winners such as technology and into sectors that have not done as well, such as finance and energy."

The Federal Open Market Committee began its two-day meeting, which will be followed by a statement and forecasts, as well as a press conference by Chair Janet Yellen, on Wednesday.

Meanwhile, a Labour Department report showed US producer prices rose 0.4% in November from the previous month, more than economists had expected, while PPI climbed 3.1% from a year earlier, the biggest gain since January 2012.

"PPI final demand prices are rising 3 percent, and this will give Fed officials that are cautious on the inflation outlook the confidence to raise rates this week knowing that core consumer inflation will start moving back up to its 2 percent target," Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in an email, Bloomberg reported.

Boeing leads Dow up
The Dow touched a record high of 24,552.97, while the S&P 500 climbed to a record of 2,669.72. Goldman Sachs, up 3%, and Boeing, up 2.4%, led the Dow's rise. Bucking the trend were Intel and Chevron, down 0.5% and 0.4% respectively.

Boeing rose after the company said it would increase its quarterly dividend by 20% and replace the existing share repurchase programme with a new $US18 billion authorisation.

"Boeing's strong and growing cash flow allows us to deepen our commitment to provide competitive returns to our shareholders, while continuing to invest in our people, innovation and growth," Boeing Chief Executive Officer Dennis Muilenburg said in a statement.

"To support our balanced cash deployment strategy, our team remains focused on improving operating performance as we deliver on our substantial order backlog and work to capture a larger share of the growing aerospace market."

In deal news, Comcast advanced 2.8% after the cable and programming firm said it was no longer pursuing an acquisition of media and entertainment assets from 21st Century Fox.

Meanwhile, Walt Disney’s talks to acquire assets from 21st Century Fox continued and a deal could be announced as soon this week, the Wall Street Journal reported. Shares of 21st Century Fox rose 1.3%, while Disney gained 0.6%.

In Europe, the Stoxx 600 Index rose 0.6%. Germany's DAX Index gained 0.5%, the UK's FTSE 100 Index rose 0.6% and France's CAC 40 Index rallied 0.8%.

(BusinessDesk)