Fed statement awaited; Apple, energy stocks shine

By Abhiram Nandakumar

REUTERS - U.S. stocks were higher on Wednesday, boosted by gains in Apple and a sharp bounce in energy stocks, ahead of the Federal Reserve's statement on interest rates.

The Fed's statement is due at 2:00 p.m. ET (1800 GMT), after its two-day policy meeting ends. The central bank hasn't hiked rates in about a decade and markets see virtually no chance it will do so at the meeting.

However, traders will scrutinize the statement for clues on when the Fed will pull the trigger.

The market is likely to remain calm until after the Fed's announcement, said Jeff Powell, managing partner of Polaris Wealth Advisors.

If the Fed uses language that implies 'immediate' or 'impending', people might interpret that as a cue for a move in December, Powell said.

The odds for a rate hike in December are now at 38 percent, according to the CME Group's FedWatch program.

At 12:55 a.m. ET, the Dow Jones industrial average was up 93.1 points, or 0.53 percent, at 17,674.53, the S&P 500 was up 13.4 points, or 0.65 percent, at 2,079.29 and the Nasdaq composite index was up 33.98 points, or 0.68 percent, at 5,064.13.

Apple's shares were up nearly 3 percent at $117.78, providing the biggest boost to the three major indexes.

The company sold 48 million iPhones in the latest reported quarter and posted a near doubling of revenue from China, allaying concerns about its business in the world's second-largest economy.

The S&P energy sector snapped a three-day losing streak and was up 2.15 percent - leading the gainers among the major S&P sectors - after a sharp rally in crude oil prices.

Exxon was up 1 percent, while Chevron rose 2.4 percent.

AIG jumped 3.7 percent to $63.19 after activist investor Carl Icahn disclosed a "large stake" in the insurer and said the company should split itself into three listed entities.

Starwood Hotels & Resorts was up 4.9 percent at $78.51 after CNBC reported Hyatt Hotels was in advanced talks to buy the company.

Twitter recovered some early losses and was down 3.6 percent at $30.20, while Akamai Technologies dropped 17.9 percent to $62.00 after disappointing results.

Amgen, GoPro and PayPal will post results after the close.

Analyst estimates for U.S. third-quarter earnings have improved, with S&P 500 companies now expected to report a modest 2 percent decline in profit, compared with the 4.9 percent drop forecast at the start of the earnings season, according to Thomson Reuters data.

Advancing issues outnumbered decliners on the NYSE by 2,458 to 543. On the Nasdaq, 2,211 issues rose and 563 fell.

The S&P 500 index showed 29 new 52-week highs and four new lows, while the Nasdaq recorded 104 new highs and 64 new lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)