By Anora Mahmudova and Sara Sjolin, MarketWatch
Dow jumps triple digits;Consumer-confidence index drops in
July
U.S. stocks looked set to break the five-day losing streak
Tuesday, as investors looked past softer economic reports and a
continued rout in China's stock market.
The S&P 500 index added 15 points, or 0.7%, to 2,082, with
energy and materials stocks leading the gains. The Dow Jones
Industrial Average gained 116 points, or 0.7%, to 17,556. The
tech-heavy Nasdaq Composite Index added 23 points, or 0.5%, to
5,062.
Tuesday's gains came after all three indexes closed firmly lower
on Monday (http://www.marketwatch.com/storyno-meta-for-guid),
tracking a global selloff spurred by an 8.5% slide in the Shanghai
Composite Index , its largest one-day loss in eight years.
The Chinese benchmark continued to fall Tuesday
(http://www.marketwatch.com/storyno-meta-for-guid), losing 1.7%.
Read: With China, stock market manipulation goes global
(http://www.marketwatch.com/story/market-manipulation-goes-global-2015-07-27)
"What investors forget is that China's stock market is still
higher than it was at the beginning of the year," said Martin
Leclerc, chief investment officer and portfolio manager at Barrack
Yard Advisors.
"The bigger question is that investors have to get used to the
idea that China is transitioning to a consumer-based economy and
will grow at a more 'normal' 4%-5% pace," Leclerc said.
Fed meeting: Investors will watch the two-day Federal Reserve
meeting that kicked off on Tuesday. A statement, due at 2 p.m. on
Wednesday, is likely to be scrutinized for clues to the timing of
an interest-rate hike.
Chairwoman Janet Yellen has previously indicated that a rate
increase is in the cards before the end of the year, possibly as
early as September.
However, expectations for a September move have faded recently,
partly because of the market turmoil in China and a slide in oil
prices.
"The Fed will surely bring the Chinese selloff and commodity
rout under their consideration and will tailor their response
accordingly. We do not think that Yellen will fan the fire any
further by bringing the exact timeline for a rate hike. In fact,
there is a strong possibility that she may water down those
expectations and use a very dovish approach," said Naeem Aslam,
chief market analyst at AvaTrade, in a note.
Read: Fed is closer to a September rate hike than many think,
says FedWatch's Tim Duy
(http://www.marketwatch.com/story/fed-is-closer-to-a-september-rate-hike-than-many-think-says-fedwatchs-tim-duy-2015-07-27)
The dollar traded mixed against other major currencies ahead of
the Fed meeting, with the ICE dollar index inching 0.3% higher to
96.740.
"A lot of the negative sentiment arrives from the speculation
that the Fed are on the cusp of hiking rates. This, in light of
global deflation and significant debt loads will only add insult to
injury. A stronger dollar (relatively speaking) is doing little to
spur inflation," wrote Brenda Kelly, head analyst at London Capital
Group.
Data: Consumer confidence fell sharply in July, perhaps because
of a more volatile U.S. stock market triggered by financial worries
in China and the latest Greek debt crisis. The consumer confidence
index dropped to 90.9 from 99.8 in June, the Conference Board said
Tuesday
The Case-Shiller home-price index for May showed that home
prices rose 1.1% but after seasonal adjustments, the reading showed
a decline of 0.2%. Home prices in May were up 4.9% from a year
earlier, slightly slower than April's annual growth of 5%. See the
city-by-city breakdown here
(http://www.marketwatch.com/story/city-by-city-look-at-house-prices-2015-07-28).
Earnings:United Parcel Service Inc.(UPS) stock jumped 5% after
the package-delivery company beat second-quarter profit
expectation, even though sales missed.
Chemicals major DuPont(DD) said second-quarter per-share
earnings fell
(http://www.marketwatch.com/story/dupont-trims-outlook-on-weak-agricultural-business-2015-07-28)
to $1.03 from $1.15 last year and trimmed its earnings outlook for
the year. Shares declined 1.2%.
Shares of Pfizer Inc.(PFE) climbed 1.3% after the drug maker
reported second-quarter earnings ahead of analyst estimates.
Ford Motor Co.(F) added 0.8% after the car maker's
second-quarter revenue beat forecasts.
Shares of Baidu Inc.(BIDU) slumped 16% after the Chinese online
portal late Monday reported earnings that missed forecasts
(http://www.marketwatch.com/story/baidu-profit-rises-but-forecast-misses-2015-07-27).
And after the market closes, Twitter Inc. (TWTR) is expected to
report second-quarter earnings of 4 cents a share, up from 2 cents
a share a year earlier.
Read:What to expect from Twitter's earnings
(http://www.marketwatch.com/story/what-to-expect-from-twitters-earnings-2015-07-27)
Other markets: European stock markets rose almost across the
board (http://www.marketwatch.com/storyno-meta-for-guid),
recovering from the China-spurred selloff on Monday. Metal prices
were mixed, while crude oil prices were flat at $47.38 a barrel
(http://www.marketwatch.com/storyno-meta-for-guid).
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