By Saumya Vaishampayan
U.S. stocks remained higher Wednesday after the release of the
Federal Reserve's latest meeting minutes, with the S&P 500 on
track to snap a five-session losing streak.
Investors attributed the move to an upbeat U.S. labor-market
report and gains in European stocks. They also eyed crude-oil
prices, which rose Wednesday but have slumped 54% since June,
raising concerns about slowing global growth.
The Dow Jones Industrial Average advanced 214 points, or 1.2%,
to 17585, trading near session highs. The S&P 500 rose 24
points, or 1.2%, to 2027 and the Nasdaq Composite Index gained 57
points, or 1.2%, to 4649.
The Fed minutes revealed that officials saw global economic
turbulence as a significant risk to the U.S. economy when they met
in December. Still, officials looked past those concerns because
they expect foreign central bankers to respond with fresh stimulus
measures. Fed officials have signaled that U.S. interest rates are
likely to rise in 2015.
Wednesday's gains come after five sessions of losses for the
S&P 500, its longest losing streak since December 2013. The Dow
has declined 2.6% since its Dec. 26 record close of 18053.71, while
the S&P 500 has fallen 3% from its Dec. 29 record close of
2090.57.
"We'd come too far too fast," said Steven Rosen, head of single
stock and ETF volatility trading at Société Générale, referring to
recent stock-market declines. Wednesday's rebound is "not that
surprising, especially when you've had this prolonged market of
buying the dips," he added.
Pullbacks in recent months have been short-lived, as many
investors believe that economic improvement and growing corporate
profits should continue to propel stocks higher. Fourth-quarter
earnings season unofficially begins on Jan. 12, when Alcoa Inc.
reports results. Overall, companies in the S&P 500 are expected
to report a 2.3% increase in fourth-quarter earnings, according to
FactSet.
"We were due for a bounce," said Quincy Krosby, market
strategist at Prudential Financial, adding that the market had been
oversold.
Boosting sentiment Wednesday, data showed that U.S. private
payrolls increased 241,000 in December. Economists surveyed by The
Wall Street Journal expected a gain of 250,000.
Improvement in the labor market is a "very strong tailwind for
the market to continue higher in 2015, excluding the global
macroeconomic situation," said Jeffrey Yu, head of single-stock
derivatives trading at UBS AG. He said that much of the recent
selling in U.S. stocks had been sparked by global concerns and the
slide in oil prices.
In the eurozone, consumer prices fell on an annual basis in
December for the first time in more than five years, down 0.2% from
a year ago, according to the European Union's statistics agency.
The data increased pressure on the European Central Bank to bolster
its stimulus program.
The unveiling of additional stimulus from the ECB would result
in a "pretty massive rally in global stocks," said Brian Needleman,
chief investment officer at Cornerstone Financial Partners, a
wealth management firm with $1.05 billion under management. He said
his biggest investment was in European stocks, particularly in the
financial, industrial and technology sectors.
The euro fell to a nine-year low against the dollar, recently
trading at $1.1823. European stocks gained. Germany's DAX gained
0.5% and the Stoxx Europe 600 also rose 0.5%.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
Access Investor Kit for Alcoa, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0138171014
Access Investor Kit for The Dow Chemical Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2605431038