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Dec 13, 11:32 AM EST

US stocks move higher ahead of expected Fed rate hike

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AP Photo/Mark Lennihan

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U.S. stocks moved higher in morning trading Wednesday ahead of an expected interest rate hike from the Federal Reserve. Technology stocks accounted for much of the market's gains. Health care companies also rose. Banks lagged the most. Energy stocks also fell as crude oil prices headed lower.

KEEPING SCORE: The Standard & Poor's 500 index rose 6 points, or 0.2 percent, to 2,670 as of 11:19 a.m. Eastern Time. The Dow Jones industrial average gained 117 points, or 0.5 percent, to 24,622. The Nasdaq added 31 points, or 0.5 percent, to 6,893. The Russell 2000 index of smaller-company stocks picked up 8 points, or 0.6 percent, to 1,524. The S&P 500 and the Dow have closed at all-time highs the past two days.

FED WATCH: The Fed is widely expected to raise its key short-term interest rate for the third time this year as the U.S. economy strengthens. Investors appear confident that the economy can withstand a gradual increase in rates. However, they will be keeping a close eye on Fed Chair Janet Yellen's comments during a news conference for signals on how aggressive the Fed might be in raising rates next year.

"The current expectation on the part of the Fed is they will raise interest rates three times next year, but clearly one of the debates that's been ongoing is what does the low level of inflation mean for the path going forward?" said Sameer Samana, global technical and equity strategist for Wells Fargo Investment Institute.

INFLATION: New inflation data did nothing to alter expectations of another Fed rate hike. The Labor Department said Wednesday that U.S. consumer prices increased 0.4 percent last month as gasoline prices surged. Prices at the pump increased a sharp 7.3 percent after falling in October. Excluding volatile food and energy prices, so-called core consumer inflation rose a modest 0.1 percent in November.

TECH GAINS: Technology companies posted solid gains. Western Digital rose 2.7 percent after the hard drive maker resolved a dispute with its partner Toshiba over Toshiba's plan to sell its flash memory business. Western Digital climbed $2.22 to $83.99.

APPLE TAKES A BITE: Finisar jumped 30.1 percent after Apple said it will invest $390 million in the fiber optic component supplier so it can make more lasers used in facial recognition technology. Finisar increased $5.81 to $25.11. Apple was up $1.39, or 0.8 percent, to $173.09.

ROSY OUTLOOK: Honeywell International rose 1.7 percent after the industrial conglomerate raised its annual profit forecast and said fourth quarter sales have been strong. The stock gained $2.56 to $156.30.

OUT THE DOOR: Diebold fell 2.2 percent after the ATM and security systems maker said CEO Andreas Mattes has resigned. The stock gave up 40 cents to $18.10.

FINANCIALS FLOUNDER: Banks and other financial stocks declined the most. Charles Schwab slid 74 cents, or 1.4 percent, to $50.82.

ENERGY: Oil prices veered lower, giving up early gains. Benchmark U.S. crude fell 19 cents to $56.95 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, slid 68 cents to $62.66 per barrel in London.

The decline in oil prices weighed on several energy stocks. National Oilwell Varco lost 46 cents, or 1.4 percent, to $32.68.

BOND YIELDS: Bond prices rose. The yield on the 10-year Treasury fell to 2.38 percent from 2.40 percent late Tuesday.

CURRENCIES: The dollar fell to 113.06 Japanese yen from 113.58 yen late Tuesday. The euro strengthened to $1.1765 from $1.1737.

THE BITCOIN TRADE: Bitcoin futures fell $290, or 1.6 percent, to $17,730 on the Cboe Futures Exchange. The futures allow investors to make bets on the future price of bitcoin. The average price of an actual bitcoin was $16,979 in morning trading on private exchanges, according to Coindesk. The price of the digital currency has soared this year, having begun 2017 under $1,000.

MARKETS OVERSEAS: In Europe, Germany's DAX fell 0.4 percent, while France's CAC-40 slid 0.5 percent. London's FTSE 100 rose 0.1 percent. Earlier in Asia, Hong Kong's Hang Seng rose 1.5 percent, while Tokyo's Nikkei 225 shed 0.5 percent. Seoul's Kospi added 0.8 percent. Sydney's S&P-ASX 200 picked up 0.1 percent and India's Sensex added 0.4 percent.

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