Wall Street melts up higher on oil jump, tech still soft

(Reuters) - U.S. stocks inched higher on Tuesday with energy stocks leading the way thanks to a jump in oil prices but technology stocks remained on the defensive after the previous day's bruising selloff.

Oil rose to its highest level so far this month, lifted by tension in the Middle East and the possibility of further falls in Venezuelan output. 

That helped push the S&P energy index (SPNY) up 0.9 percent.

S&P 500 technology stocks (SPLRCT), after a fleeting advance at the opening bell, were back modestly in the red, adding to Monday's steep losses when Facebook Inc's (O:FB) data privacy issues hit the sector.

Investors are also focused on the Federal Reserve's two-day policy meeting where it is expected to raise interest rates by a quarter percentage point. But the bigger question is how aggressive the U.S. central bank will be with monetary policy after that.

Traders currently expect two more rate hikes later this year, although they said policymakers could set a hawkish tone by forecasting four increases in their "dot plot" projections.

The past nine years of U.S. stock market gains have come with the Fed fostering an environment of easy money for the financial system, but it has begun gradually withdrawing that accommodation as the economy appears to be on healthier footing. Few economists expect new Fed chair Jerome Powell to alter the trajectory of the bank's anticipated rate path, but as it is his first meeting at the helm, investors have been somewhat on edge as the meeting approaches.

Aside from the Fed, the Trump administration is creating a stir with plans for up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, sources familiar with the matter told Reuters.

"There's much more volatility in this marketplace and that's because there two main fears - monetary policy mistake and trade policy mistake and on backdrop is a lot of chaos that comes out of White House," said Art Hogan, chief market strategist at B. Riley FBR in Boston.

At 10:14 a.m. ET, the Dow Jones Industrial Average (DJI) was up 0.34 percent at 24,694.22. The S&P 500 (SPX) gained just 0.07 percent to 2,715 and the Nasdaq Composite (IXIC) rose 0.1 percent to 7,351.60.

Shares of Facebook (O:FB), which instigated the rout, were down 2.5 percent, adding to a 6.8 percent decline on Monday on reports that its users' data was misused.

Chief Executive Mark Zuckerberg faced calls from both U.S. and European lawmakers demanding explanations and fears of increased regulation on how companies use data had sent shares of other internet stocks down as well.


Oracle (N:ORCL) was the biggest percentage decliner on the S&P 500, falling 9 percent after the business software maker reported quarterly revenue that missed Wall Street estimates on disappointing sales from its cloud business.