By Anora Mahmudova and Victor Reklaitis, MarketWatch
Freeport McMoRan rallies for 7th consecutive session
U.S. stocks closed higher on Wednesday as a rally in health-care
stocks helped propel them to gains during an up-and-down trading
session.
Analysts said investors are still unwinding bets that stocks
will fall further--a crowded trading strategy that has produced big
intraday swings.
The Nasdaq Composite rose 42.79 points, or 0.9%, to finish at
4,791.15, driven by a rally in biotechs. The iShares Nasdaq
Biotechnology ETF rallied 2%, recovering some of Tuesday's steep
losses.
Meanwhile, the S&P 500 gained 15.91 points, or 0.8%, to end
at 1,995.83. The S&P at one point hit 1,999 but struggled to
trade past a so-called resistance level of 2000, which market
participants say would indicate a bullish trend for the broad
stock-market benchmark.
Investors "need the S&P 500 to make a run and a break
through 2,000," and that would energize other markets, said Scott
Schuberg, CEO of Rivkin Securities in Australia, in a note late
Tuesday. The U.S. stock benchmark is down 3.1% for the year.
(http://w.graphiq.com/w/9HKN8IZ109)
The Dow Jones Industrial Average added 122.10 points, or 0.7%,
to close at 16,912.29, posting gains for the fourth straight
session, markings its longest win streak since July 14, when stocks
rose for four straight sessions.
Earlier, the main indexes, which have been closely tracking oil
prices, dipped into negative territory, following volatile crude
futures lower.
"The energy sector rallied drastically over the past few days,
spreading optimism to broader markets and it's not surprising to
see some consolidation after big gains," said Brian Fenske, head of
sales trading at ITG.
Fenske said gains over the past week had more to do with the
unwinding of bearish positions in the energy sector.
"The trade of shorting energy stocks, particularly low-quality,
highly-leveraged companies, was overcrowded, so when oil began to
rally, investors scrambled to cover short positions, taking all
energy stocks higher," Fenske said.
Among the top five gainers on the S&P 500, four are down
between 27% and 51% for the year.
(https://twitter.com/michaelbatnick/status/651825043236880388)
Investors also focused on earnings results from companies such
as Constellation Brands Inc. (STZ).
"Until we start seeing earnings results next week, trading will
be driven by macro news and not fundamentals," Fenske added.
Other markets: November West Texas Intermediate crude rose as
high as 2% early Wednesday
(http://www.marketwatch.com/story/oil-prices-extend-gains-on-lower-us-production-2015-10-07)
but turned lower, to settle 1.5% lower at $47.81 a barrel, logging
its first loss in four sessions.
Energy shares led the way higher for European markets early
Wednesday, but the fall in oil prices reversed those gains. Trading
remains closed for a holiday in Shanghai, and Japan's central bank
kept its monetary policy unchanged
(http://www.marketwatch.com/story/bank-of-japan-stands-pat-on-policy-despite-economic-troubles-2015-10-07).
Gold settled 0.2% higher at $1,148.70 an ounce, rising for the
fourth straight session. Meanwhile the dollar was little
changed.
Stocks to watch: Yum! Brands (YUM) shares plunged 19% for the
biggest drop among S&P 500 components after the parent company
for KFC, Pizza Hut and Taco Bell late Tuesday cut its earnings
outlook
(http://www.marketwatch.com/story/yum-brands-cuts-outlook-on-china-woes-2015-10-06-164855228)
for the year, citing a slower-than-expected recovery in China and
lingering currency issues.
Miner Freeport-McMoRan Inc. (FCX) was among the S&P's best
gainers, rallying about 10%, booking its seventh straight day of
gains. Since Sep 29, the stock gained 46%, however it is still down
more than 44% since the start of the year.
Adobe Systems Inc. (ADBE) on Tuesday disappointed investors
after issuing a lower-than-expected outlook for its coming fiscal
year. Shares fell 5.3%.
Constellation Brands Inc. (STZ) shares rose 2.5% after adjusted
earnings topped expectations.
U.S. economic news: There were no top-tier U.S. economic reports
due Wednesday, and no Federal Reserve speeches. Minutes from the
last Fed meeting are slated to get released Thursday, along with
weekly jobless claims.
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(END) Dow Jones Newswires
October 07, 2015 16:53 ET (20:53 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.