By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Biotechnology stocks gains sharply
NEW YORK (MarketWatch) -- U.S. stocks kicked off the week on a
high note, posting solid gains on Monday, as international markets
rallied and investors looked toward the Federal Open Market
Committee's meeting and policy statement on Wednesday.
The S&P 500 (SPX) rose 27.79 points, or 1.4%, to 2,081.19,
with nine of its 10 main sectors gaining. Health-care and utility
stocks led the gains, while materials lagged behind.
The Dow Jones Industrial Average (DJI) jumped 228.11 points, or
1.3%, to 17,977.42, with 28 of its 30 components finishing higher.
The Dow moved triple-digits in the six of the past seven
sessions.
The Nasdaq Composite (RIXF) added 57.75 points, or 1.2%, to
4,929.51, led by big gains in biotechnology stocks.
Colin Cieszinski, chief market strategist at CMC Markets, said
Monday's action was a typical trading bounce after selling off last
week.
"Despite today's bounce the S&P 500 is still rangebound. The
upside is capped because so much focus is on the Fed's tightening
plans, but the downside is floored because of growing economy and
earnings potential," Cieszinski said.
"This kind of choppy market is normal in a time of transition,"
the CMC strategist noted.
JJ Kinahan, chief derivatives strategist at TD Ameritrade, said
lighter volumes have made it easier for stocks to rebound
sharply.
"Markets have been oversold and beat up and part of the reason
for a sharp bounce is some investors are covering short positions
ahead of the Fed decision on Wednesday while light volumes amplify
this action," Kinahan said.
He noted that investors have begun unwinding positions ahead of
the quadruple witching day on Friday, when all quarterly options
and futures contracts expire.
Analysts said a rally in European equity markets helped positive
mood in the U.S. The German DAX 30 index jumped 2% and climbed
above 12,000 for the first time on Monday.
Meanwhile, the Shanghai Composite Index rallied 2.3% to its
highest settlement in 5 1/2 years after Chinese premier Li Keqiang
said the government would step up efforts to bolster economic
growth
(http://www.marketwatch.com/story/china-signals-fresh-moves-for-economy-2015-03-15-124854757).
In other markets, oil prices (CLJ5) settled at their lowest
level in six year, dropping 2.1% to $43.88 a barrel. Gold (GCJ5)
eked out gains, rising 0.1%, to settle at $1,153.20.
Cieszinski noted that the stock market somewhat decoupled from
the oil market. "The supply glut with no cuts in production is
pushing oil prices lower, but it has been affecting stock markets
less lately," he said.
Data: On Monday, investors assessed a batch of data that came in
softer than expected. The Empire State manufacturing gauge moved
slightly lower in March, but was still pointing to improving
conditions, with solid gains in the employment index.
Industrial production rose a seasonally adjusted 0.1% in
February, the Federal Reserve said Monday. The increase was smaller
than expected.
Read: Does the Fed save the 'patient' or let it go this week?
(http://www.marketwatch.com/story/does-the-fed-save-the-patient-or-let-it-go-this-week-2015-03-15)
(http://www.marketwatch.com/story/does-the-fed-save-the-patient-or-let-it-go-this-week-2015-03-15)
(http://www.marketwatch.com/story/us-economy-still-not-following-script-for-breakout-year-2015-03-15)
(http://www.marketwatch.com/story/us-economy-still-not-following-script-for-breakout-year-2015-03-15)Stocks
to watch: Netflix Inc.(NFLX) slumped 3.8% after Evercore ISI
downgraded the streaming video service
Life Time Fitness Inc. shares (LTM) jumped 5.2% to $70.68 after
the fitness operator agreed to be bought by private-equity firm TPG
and Leonard Green & Partners L.P. for $72.10 a share.
Edwards Lifesciences Corp.(EW) shares jumped 9.8% after the
company announced on Sunday that 30-day results for patients
treated with the SAPIEN 3 heart valve showed the lowest mortality
rates of any of the PARTNER studies.
DuPont(DD) shares fell 4.3% after the company on Friday
criticized Nelson Peltz's hedge fund Trian Fund Management
(http://www.marketwatch.com/story/quiksilver-kodak-earnings-in-spotlight-2015-03-15)
for its "high-risk agenda" in trying to breaking up the chemicals
company. DuPont said it would be willing to add one of the nominees
to its board that the hedge fund is recommending.
Read more about stock action in the Movers & Shakers column
(http://www.marketwatch.com/story/quiksilver-kodak-earnings-in-spotlight-2015-03-15).
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