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Market Update

S&P 500, FTSE 100 Jump on Oil Bounce and Ahead of Fed Decision


Author: Nichole Harper
ticker.com
Last Update: 11:35 AM ET December 15 2015

11:30 AM New York City, New York Stocks rebounded on Wall Street and the S&P 500 and Tollbooth Strategy indexes jumped after crude oil rebounded from its near 4-year low. European markets surged more than 1.5% and the high yield bond market rout spread to Europe.

Market indexes on Wall Street traded higher after crude oil rebounded from its near four-year low and credit market losses worsened in the high yield segment.

High yield bond market has been under pressure as the Fed meeting gets underway tomorrow and the recent plunge in oil market also affected bonds worth $2 trillion issued to shale oil companies since 2010.

High yield bonds issued to shale oil explorer has been on the sharp decline in the liast two weeks with the oil price decline of more than 44% in 2015 on top of similar losses in in 2014.

The index of consumer prices in November was unchanged from October. For the year all item index before seasonal adjustment rose 0.5%.

The food index fell 0.1% and energy index dropped 1.3% while gasoline index slumped 2.4% from 0.4% increase in October, the Department of Labor said.

On Wall Street, Tollbooth Strategy Index increased 51.12 or 0.5% to 10,863.92.

S&P 500 index jumped 22.21 or 1.1% to 2,044.42 and the Nasdaq Composite Index increased 55.09 or 1.1% to 5,007.32.

Crude oil in New York gained to $36.86 a barrel and gold rose $1.13 to $1,060.99 an ounce.

U.S. Movers

3M Co (MMM) slumped 4.4% or $6.93 to $150.77 after the diversified technology company lowered earnings per share forecast for the year of about $7.55 from earlier estimated range of $7.60 to $7.65.

In August, the company forecasted earnings per share for the year between $7.73 and $7.93.

Inland Real Estate Corporation (IRC) soared 6.1% or 61 cents to $10.55 after the real estate developer agreed to be acquired to be taken private by real estate funds managed by DRA Advisors LLC for $10.60 per share in cash or about $2.3 billion including debt.

The transaction is expected to close in the first-half of 2016.

Valeant Pharmaceuticals Intl Inc (VRX) surged 13.7% or $12.85 to $106.79 after the Canada-based pharmaceutical and medical devices maker signed 20-year agreement with Walgreens Boots Alliance Inc to offer discounts on its branded drugs.

European Markets

European stocks staged a comeback on Tuesday, ahead of the Federal Reserve meeting in the U.S., widely anticipated to raise interest rates for the first time in nine years.

Weakness in bond market in New York for the third spread to the stock and bond markets in the euro zone.

Nearly $2 trillion worth of bonds are issued to oil companies since 2010 and many of these shale gas producers are struggling with the recent plunge in oil prices.

A slight rebound in oil prices from five-year low also supported the gains in Europe.

While a U.S. rate hike to 0.25% to 0.50% indicates a stronger economy, there are ongoing concerns that higher rates would slow down the growth and would affect the U.S. corporate debt market and the euro zone government bonds.

Crude oil price in London, which have been falling for three weeks due to oversupply worries, rose on bargain-hunting. U.S. crude-oil prices gained 1.3% to $37 a barrel.

In Europe, preliminary employment data indicated growth of 0.3% in the euro zone and 0.4% in EU28 for the third quarter from the previous quarter, according to Eurostat.

In the U.K., annual inflation consumer prices increased 0.1% in November, compared to a decrease of 0.1% in October, according to the Office for National Statistics.

Producer prices in the U.K. declined 1.5% in November, compared to a decline of 1.4% in October.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc