Stocks dip fractionally as Street anticipates rate hike

Stocks finished fractionally in the red Thursday as Wall Street continued to grapple with the prospect for the first Federal Reserve rate hike in nearly a decade and investors continued to shrug off the latest geopolitical risk: terrorism.

The Dow ended down less than 0.1% as UnitedHealth (UNH) held down gains. The Dow component plunged more 5% after the health insurance company warned that Obamacare is taking a toll on the company's bottom line and it may stop offering individual insurance plans through public exchanges.

The Standard & Poor's 500 index also fell less than 0.1%, while the Nasdaq composite slipped 0.1%.

Wall Street was attempting to build on Wednesday's gains, when the Dow Jones industrial average rallied nearly 250 points after minutes of the Fed's October meeting suggested that economic conditions were shaping up enough for the U.S. central bank to increase short-term borrowing costs. The Fed's short-term borrowing rate has been pegged at 0% since 2008 and low rates have been a major driver of higher stock prices in the current stock bull market.

UnitedHealth warns it may exit Obamacare plans

Uncertainty regarding the timing of the first rate hike has been a headwind for the stock market in recent months. Wall Street seems to be coming around to the idea that the economy must be strong enough for the Fed to consider hiking rates.

What's more, investors seem to be latching on to the Fed's ongoing pledge that it will increase interest rates at a gradual pace once it kicks off its rate normalization policy.

Fed: Economy 'could well' handle rate hike

Wall Street was also digesting mixed news related to initial public offerings. Mobile payments company Square last night priced its IPO at $9 a share, below the expected range of $11 to $13 per share. Shares opened at $11.20 a share and were up more than 40% to $12.97.

Square IPO puts fears about tech stocks on hold for a day

Similarly, Match Group, the owner of dating websites like Tinder, priced its IPO at $12 per share, which was at the low end of the $12 to $14 range. Match then opened at $13.50 a share and was up 20% to $14.44.

The rally in recent days has been a bit of a surprise, as stocks have surged on the heels of Friday's terror attack in Paris, daily manhunts for terrorists in France and Belgium, as well as ongoing terror threats from jihadists. In addtion, the threat of rate hikes had previously proved to be a negative for stocks.

Shares in Europe also continued to rally despite the terror threat there. The broad Stoxx Europe 600 was up 0.4%. Germany's DAX index was up 1.1% and the CAC 40 in Paris was 0.2% higher.

On the earnings front in the U.S., shares of in-home coffee system maker Keurig Green Mountain (GMCR) surged more than 23% after posting better-than-expected quarterly earnings and boosting its dividend. Shares of electronics retailer Best Buy (BBY) tumbled 3% after its same-store sales grew at a slower-than-expected pace of 0.8%.

Stocks also rose in Asia, with Japan's Nikkei 225 closing up 1.1%. Shares of Hong Kong's Hang Seng index rose 1.4% and mainland China's Shanghai composite closed 1.4% higher.