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Stocks close at record highs ahead of Fed announcement

CNBC logo CNBC 9/19/2017 Fred Imbert
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Stocks closed higher Tuesday as the Federal Reserve kicked off a two-day monetary policy meeting.

The Dow added 39 points to hit a record high, with Verizon and Goldman Sachs contributing the most gains.

The S&P 500 rose 0.11 percent to a record, with telecommunications and financials leading advancers. The Nasdaq advanced 0.1 percent and also posted a record close.

The Fed is not expected to raise rates after its meeting. However, many market participants believe the central bank will announce the unwinding of its massive $4.5 trillion portfolio.

"This is going to be unprecedented and every central bank in the world will be watching how" the Fed accomplishes this, said Quincy Krosby, chief market strategist at Prudential Financial. "But investors will also be looking for clues about whether we'll get another rate hike in December."

The Fed has already raised interest rates twice this year and it expects to hike once more before year-end. Market expectations for a December rate hike rose to 58.3 percent on Tuesday on strong imports data.

U.S. import prices posted their biggest gain in seven months in August amid a spike in petroleum costs.

Treasury yields traded mostly flat, with the benchmark 10-year yield at 2.22 percent and the two-year yield at 1.389 percent.

Wall Street also looked to the United Nations, where U.S. President Donald Trump will try to rally members to confront threats like North Korea and Iran. Trump is scheduled to address the U.N. General Assembly at 10:30 a.m. in New York.

Tension between the U.S. and North Korea has escalated recently. Last week, the isolated Asian nation launched a missile that flew over Japan before landing in the sea.

The launch took place after the U.N. Security Council unanimously imposed a ban on North Korea's textile exports and capped its crude oil imports.

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