US stocks jump as investors ready for looming rate hike

Minutes from the most recent Fed Reserve policy meeting showed a core of officials backed a possible rate hike in December

US stocks strengthened and long-dated Treasury prices cut losses on Wednesday after minutes from the most recent Federal Reserve policy meeting showed a core of officials backed a possible rate hike in December.

The minutes of the Fed's October 27-28 meeting showed "most" participants felt conditions for a rate hike "could well be met by the time of the next meeting."

Earlier, two Fed officials expressed confidence that they will be able to pull off a relatively smooth interest-rate hike when the time comes.

"I think the market is ready and comfortable for an increasing Fed funds rates," said Alan Rechtschaffen, portfolio manager at UBS Wealth Management Americas in New York.

"We just have to turn this aircraft carrier around, get out of this zombie-like economy which is being fed on an elixir of low interest rates and get to a process of normalization," Rechtschaffen said.

The Dow Jones industrial average rose 193.28 points, or 1.11%, to 17,682.78, the S&P 500 gained 25.9 points, or 1.26%, to 2,076.34 and the Nasdaq Composite added 71.75 points, or 1.44%, to 5,057.77.

Major European stock index fell as security issues remained a focus for investors. A suicide bomber blew herself up in a police raid that sources said had foiled a jihadi plan to hit Paris's business district, days after attacks that killed 129 across the French capital.

The pan-European FTSEurofirst 300 index, which had risen 2.6% on Tuesday, dipped 0.2% Wednesday, with industrial gas company Air Liquide off sharply after announcing an expensive-looking acquisition. The French CAC 40 index fell 0.6%.

An index of major global markets rose 0.5%.

The US dollar edged up 0.02% against a basket of currencies after hitting a seven-month high on Tuesday, while the euro rose 0.06% against the greenback. The dollar index has risen more than 6% in the past month.

US housing starts in October fell to a seven-month low as single-family home construction in the South tumbled, but a surge in building permits suggested the housing market remained on solid ground.

Benchmark 10-year Treasuries notes were down 4/32 in price for a yield of 2.2746%. Prices for 30-year Treasuries were up 2/32 with a yield of 3.0447%.

German Bund yields slipped 2.5 basis points to 0.507%.

"There is a bit of a safety bid for core bonds from the nervous energy around events in Paris," said Matthew Cairns, fixed income strategist at Rabobank.

Oil prices pared earlier gains, after US crude stockpiles neared record highs. US crude futures fell below $40 during the session, to $39.91, and last traded up 0.3% at $40.78 per barrel. Brent crude futures rose 1.5% to $44.21 per barrel.

Zinc, lead and nickel fell, to around their lowest points in five to seven years, as fears persisted over waning demand in top metals user China.

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