By Riva Gold and Amrith Ramkumar 
   -- Dollar extends declines ahead of Fed meeting 
 
   -- General Mills surges after earnings; FedEx and Micron drop 
 
   -- Oil prices rebound 

U.S. stocks rose Wednesday ahead of a Federal Reserve decision that is expected to set the tone for interest rates in 2019.

The Dow Jones Industrial Average rose 207 points, or 0.9%, to 23882, after opening flat. The S&P 500 added 1%, and the tech-heavy Nasdaq Composite was up 1.1%.

All three benchmarks are still down more than 9.5% for the quarter and more than 6% in December alone.

The Fed is slated to release its interest-rate decision, statement and projections from its December meeting later Wednesday, marking one of the last major scheduled events for investors to monitor in 2018.

The outcome of the meeting and the Fed's assessment of the economy will be critical for investor sentiment, analysts say. Weakness in rate-sensitive areas, including the housing and auto sectors, has stoked fears that tighter financial conditions could further slow the U.S. economy.

Yet signals that the Fed might be less gradual with its approach next year have made some investors worry that growth is cooling more quickly than anticipated, buffeting stocks in recent weeks. The outsize swings have increased focus on Wednesday's decision, with worries about trade and financial conditions snowballing late in the year.

"If the fears stop building or build at a much slower rate, that could end up being a positive for the market," said Patrick Kaser, portfolio manager at Brandywine Global.

The strength of the labor market and broader U.S. economy is expected to keep the central bank on course to raise rates at Wednesday's meeting for the fourth time this year, though lingering uncertainty about inflation and trade tensions have muddled the Fed's path moving forward.

President Trump has consistently criticized the central bank for boosting rates, and some analysts are worried that higher borrowing costs will threaten corporate profitability moving forward.

"You need to see some calming words, in terms of downgrading [the Fed's] view on the economy and emphasizing the path forward is data-dependent," said Patrick Spencer, vice chairman of equities at Baird.

With sentiment around markets so negative, "you could see a relief bounce out of this depending on how [Chair Powell] moderates his language," he added.

February's stock-market selloff was largely driven by rising wage growth and inflation jitters. Markets tumbled again after Fed Chairman Jerome Powell said in October he believed the U.S. economy was "a long way from neutral", referring to the point at which interest rates are neither spurring nor slowing economic growth.

Stocks then briefly rallied last month when Mr. Powell appeared to walk back those comments but have since tumbled anew with analysts anxious about slower-than-expected growth.

The yield on the benchmark 10-year U.S. Treasury note fell to 2.817% Wednesday, according to Tradeweb, from 2.825%. Bond yields fall as prices rise and have slid lately since settling at their highest level since May 2011 earlier this fall. The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, was down 0.4%.

Analysts have been weighing how the Fed should proceed given muted inflation and a recent tumble in oil prices. U.S. crude slid another 7.3% Tuesday, bringing it nearly 40% below its peak from early October. Prices rebounded more than 2% Wednesday, boosting energy stocks.

General Mills was among the market's leaders, surging more than 5% after the food company topped earnings expectations. And Pfizer shares climbed after the drugmaker and GlaxoSmithKline said they would create a consumer health-care giant.

Investors say concerns about slowing global growth amid trade disruptions will likely continue to swing a range of stocks and commodities. Negotiations between the U.S. and China regarding their monthslong tariff fight are continuing, but some companies have already reported tepid demand for their products and services.

Chip maker Micron Technology fell 2.6% after the company missed sales targets, and FedEx slumped 9.5% after posting downbeat results.

"Global trade has slowed in recent months and leading indicators point to ongoing deceleration," FedEx Chief Financial Officer Alan Graf said in the company's earnings release.

Elsewhere, the Stoxx Europe 600 was up 0.5% as a budget-deficit agreement buoyed shares of Italian lenders, while markets in Asia closed mixed.

Hong Kong's Hang Seng inched up 0.2%, and Japan's Nikkei Stock Average fell 0.6%. Stocks in Shanghai and Shenzhen fell over 1%.

Write to Riva Gold at riva.gold@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

December 19, 2018 11:08 ET (16:08 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.