Wall Street gains as oil strengthens

The Dow moved higher as gains in shares of Chevron and DowDuPont outweighed declines elsewhere. Photo/File.

Wall Street gained as the US Federal Reserve is expected to announce an interest rate increase and provide updated economic and rate forecasts.

In 12:16 pm trading in New York, the Dow Jones Industrial Average climbed 0.5 percent, while the Nasdaq Composite Index gained 0.3 percent. In 12.01pm trading, the Standard & Poor's 500 Index rose 0.4 percent.

US Treasuries slipped, bolstering the yield on the 10-year note one basis point to 2.9 percent. The greenback also weakened.

The Federal Open Market Committee's post-meeting statement and forecasts, as well as the press conference by Chair Jerome Powell, will be scrutinised for clues whether the central bank's pace of hikes this year might accelerate from the three it has so far flagged.

"Whether we have three or four rate hikes this year shouldn't be that big of a difference to the economy, but it will have a big impact on market prices and market psychology," Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance, told Bloomberg.

The chances of four or more hikes are now about one in three, a new high, according to fed funds futures, Bloomberg reported.

The Dow moved higher as gains in shares of Chevron and those of DowDuPont, recently up 2.4 percent and 2.2 percent respectively, outweighed declines in shares of Procter & Gamble and those of Apple, down 1 percent and 0.6 percent respectively.

Shares of Chevron and those of Exxon Mobil, the latter up 1.4 percent recently, gained with the price of oil. West Texas Intermediate crude climbed to the highest in almost seven weeks after an Energy Information Administration report showed a surprise drop in US crude inventories, which declined 2.6 million barrels in the week to March 16.

"The report was supportive of prices, as a large jump up in the refinery utilisation rate and lowered crude oil imports combined to cause a net drawdown," John Kilduff, a partner at energy hedge fund Again Capital in New York, told Reuters.

In a sign of strong investor demand, Dropbox upgraded the price range for its initial public offering, saying it now expects the offering price per share will be between US$18 and US$20, up from a previous range of between US$16 and US$18. Final pricing is expected on Thursday.

Shares of Monsanto gained, up 0.9 percent as of 12.28pm in New York, as Germany's Bayer earned the nod from European Union antitrust regulators for its takeover of the US company. Shares of Bayer closed 0.4 percent weaker in Frankfurt.

In Europe, the Stoxx 600 Index declined 0.3 percent from the previous close. The UK's FTSE 100 index fell 0.3 percent, as did France's CAC40 Index added 0.6 percent, while Germany's DAX Index inched 0.02 percent lower.