NEW YORK: Wall Street stocks were higher on Tuesday afternoon with the biggest boost from the financial sectors as investors bet on strong economic growth a day ahead of the US Federal Reserve's widely-expected hike in interest rates.
Earlier in the day, a Labor Department report showed US producer prices rose in November as gasoline prices surged and the cost of other goods increased, leading to the largest annual gain in nearly six years and pointing to a broad acceleration in wholesale inflation pressures.
"From an economic perspective, we did see things like PPI come in today a little bit stronger than anticipated, which supports the path of the Fed. We're in a synchronized global uptick in activity, and it's certainly evidenced here in the US rates moving a little bit higher," said Bill Northey, senior vice president, US Bank Wealth Management, in Helena, Montana.
At 2:55 p.m. ET, the Dow Jones Industrial Average rose 155.44 points, or 0.64 percent, to 24,541.47, the S&P 500 gained 9.12 points, or 0.34 percent, to 2,669.11 and the Nasdaq Composite dropped 1.05 points, or 0.02 percent, to 6,874.03.
The financial sector was the biggest driver with a 1.2-percent gain, followed by the healthcare sector, up 0.5 percent; the telecom index was the biggest percentage gainer with a 2.4-percent jump.
"As investors become more comfortable (that) the economic recovery appears to be expanding, they're starting to dip their toes into the value sectors like industrials, financials and energy that need earnings growth to expand," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
"People are starting to think about 2018 and they're getting reports into their inbox. Generally they're pretty upbeat."
Boeing - the biggest boost for the Dow - was last up 2.8 percent at $291.05 after it said would raise its quarterly dividend by 20 percent and announced an $18-billion share buyback authorization.
Declines in technology heavyweights, including Apple and Facebook, dragged on the Nasdaq.
The Fed is widely expected to raise its benchmark interest rate for third time this year on Wednesday. Traders see an 87.6-percent chance of a 25-basis-point rate hike, according to the CME Group's Fedwatch tool.
Investors will watch for the central bank's forecast on future rate hikes and its view on the health of the economy.
"The market is anticipating 1-2 rate hikes and the Fed is looking at 3-4 (in 2018). There is going to be some reconciliation of those opinions, and so far in the last few years, the market has been more right than the Fed has," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Tesla was up 2.7 percent after PepsiCo reserved 100 of company's new electric Semi trucks.
Comcast shares rose 2.4 percent after the cable operator abandoned its bid for most of the assets of Twenty-First Century Fox, leaving Walt Disney as the sole suitor of the $40 billion-plus deal.
Advancing issues outnumbered declining ones on the NYSE by a 1.01-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored decliners.
The S&P 500 posted 41 new 52-week highs and 1 new low; the Nasdaq Composite recorded 51 new highs and 42 new lows.
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