After rising nearly 350 points by 1 pm, a series of negative news including fears of a government shutdown after Democrats rejected the Republicans spending proposal and crude again dropping more than 7 percent, again because of reports of oversupply, and the Dow dropped over 400 points by 3 pm to rally again in the final hour and close 82 up.  So volatility was again the theme for the day’s trading.  But as before, the conclusion of the two-day Fed meeting on Wednesday will either calm or rile the markets depending on whether or not it brings clarity.  The VIX is up again, today its highest in ten months.  Volume was again very rigorous at nearly 9.2 billion shares traded. 

Tue DECEMBER 18, 2018 / 4:45 a.m. 

S&P flat as government shutdown threat, Fed decision loom

April Joyner

DJ:  23,675.64  +82.66       NAS:  6,783.91  +30.18         S&P: 2,546.16  +0.22       12/18

NEW YORK (Reuters) - The benchmark S&P 500 stock index ended little changed in a choppy trading session on Tuesday as the possibility of a partial U.S. government shutdown raised investor jitters ahead of a highly anticipated meeting of the Federal Reserve.  The Dow Industrials and the Nasdaq posted slight gains, however, as shares of Boeing Co (BA.N) and the group of internet-focused momentum stocks known as FAANG rose. 

The S&P 500 had risen as much as 1.1 percent earlier in the session but gave up most of its gains after U.S. Senate Majority Leader Mitch McConnell said Democrats had rejected his spending bill proposal. Without the passage of a spending bill, several government agencies are at risk of a shutdown.

The benchmark index briefly turned negative in intraday trading to fall below Monday’s levels. On Monday, the S&P 500 ended at a 14-month low.  S&P 500 energy stocks .SPNY led the declines, falling 2.4 percent. U.S. crude prices CLc1 tumbled more than 7 percent on concerns of oversupply.  “The market tested yesterday’s lows and bounced back off of that level,” said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. “Investors are getting squared up ahead of the Fed and ahead of a potential partial government shutdown.”

  In addition to the looming government shutdown threat, investors prepared for the outcome of the two-day meeting of the Federal Open Market Committee, which began on Tuesday. Market participants widely expect the Fed to raise benchmark U.S. rates this month, but some investors anticipate that the U.S. central bank will indicate fewer rate hikes for 2019 than previously expected.  Traders in the options market continued to expect increased stock market volatility in coming days. The Cboe Volatility Index .VIX, the most widely followed gauge of expected near-erm gyrations for the S&P 500, finished up 1.06 points at 25.58, its highest close in 10 months. 

The Dow Jones Industrial Average .DJI rose 82.66 points, or 0.35 percent, to 23,675.64, the S&P 500 .SPX gained 0.22 point, or 0.01 percent, to 2,546.16 and the Nasdaq Composite .IXICadded 30.18 points, or 0.45 percent, to 6,783.91. 

Aside from Boeing, several other stocks ended a string of losses.  Goldman Sachs Group Inc (GS.N) shares rose 2.1 percent to snap a nine-day losing streak related to the 1MDB scandal.

Johnson & Johnson (JNJ.N) shares rose 1.0 percent after a nearly 13 percent drop over two days on a Reuters report that the company knew for decades that its Baby Powder contained asbestos. 

Declining issues outnumbered advancing ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.43-to-1 ratio favored decliners.  The S&P 500 posted no new 52-week highs and 87 new lows; the Nasdaq Composite recorded eight new highs and 523 new lows.

Volume on U.S. exchanges was 9.18 billion shares, compared with the 8.06 billion-share average over the last 20 trading days.