Health shares prop up Wall Street as banks dip ahead of expected rate hike

By Amy Caren Daniel

(Reuters) - Health stocks helped Wall Street edge higher on Wednesday, although banks slipped ahead of a widely expected interest rate hike by the U.S. Federal Reserve.

Financial stocks overall were 0.13 percent lower, reflecting the drop in bank shares. Only JPMorgan, Citigroup and M&T Bank eked out gains.

With a third rate hike all but certain, and chances of a fourth increase in December firming after robust consumer confidence data on Tuesday, investors are keen to know whether the Fed will officially end the era of easy money.

Some analysts are expecting a more aggressive tilt, whether it comes in the policy statement at 2 p.m. ET (1800 GMT), the accompanying economic and interest rate projections, or at Fed Chairman Jerome Powell's press conference.

"The market likes to be unchanged going into the Fed decision just so it doesn't have a view in either direction and be ready," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

"The theme of today is going to be what the Fed's forward guidance looks like ... which is important to participants so they can gauge where the yield curve will go or how they think the Fed will let the economy run."

U.S. 10-year Treasury yields are a shade below their seven-year peak. Higher bond yields makes shares less attractive, especially those of high-dividend paying companies such as utilities and real estimate.

Utilities were flat, while real estate stocks dipped 0.06 percent.

At 10:04 a.m. EDT the Dow Jones Industrial Average was up 39.29 points, or 0.15 percent, at 26,531.50, the S&P 500 was up 4.34 points, or 0.15 percent, at 2,919.90 and the Nasdaq Composite was up 17.64 points, or 0.22 percent, at 8,025.11.

Nine of the 11 major S&P 500 sectors were trading higher, led by the health sector's 0.51 percent rise.

Alexion Pharmaceuticals gained 5.4 percent on a deal to buy privately held biotech company Syntimmune for a total value of up to $1.2 billion.

Among laggards were energy shares , which slipped 0.36 percent as oil prices eased after a recent jump.

Nike's shares fell 2.9 percent after the company posted a small rise in quarterly gross margins and left its 2019 forecast unchanged.

Nike was the top loser on the Dow, while the top gainer was IBM, which rose 1.9 percent after UBS upgraded the stock to "buy".

Declining issues were roughly the same as advancers on both the NYSE and the Nasdaq.

The S&P index recorded 19 new 52-week highs and 10 new lows, while the Nasdaq recorded 30 new highs and 33 new lows.

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva)