By Sue Chang and Joseph Adinolfi, MarketWatch
Juniper Networks slumps
U.S. stocks climbed Tuesday to their best levels of the day,
piggybacking on oil futures which rallied to settle at their
highest levels of 2016.
The Dow Jones Industrial Average rose 183 points, or 1.1% to
17,739.91.
The S&P 500 index was up 22 points, or 1.1%, to 2,064.57,
after slipping into the red about an hour into the day's trading
action. Gains in the broad-market index were led by a 3.3% rise in
energy stocks.
The tech-heavy Nasdaq Composite Index climbed 43 points, or
0.9%, to 4,877.56.
"With oil prices climbing above $40 a barrel the market is
enjoying a strong rally," said Quincy Krosby, market strategist at
Prudential Financial.
After a wobbly start to the day, oil futures spiked on hopes
that key oil producers will agree on an output freeze at their
meeting this Sunday and as reports pointed to a possible output
freeze between Saudi Arabia and Russia
(http://www.marketwatch.com/story/oil-soars-more-than-3-on-reports-of-saudi-russian-output-freeze-2016-04-12),
two of the world's largest crude producers, which could help lay
the groundwork for a broader accord among major oil producers.
U.S.-traded crude oil
(http://www.marketwatch.com/story/oil-prices-dip-as-investors-cash-in-on-overnight-surge-2016-04-12)
surged 4.5% to close at $42.17 a barrel, its highest settlement for
the year.
The U.S. dollar's recovery against the Japanese yen--viewed as a
haven asset--helped to boost demand for risky assets such as
stocks, according to Quincy.
All three stock indexes fell on Monday,
(http://www.marketwatch.com/story/stock-futures-rise-as-dollar-steadies-investors-wait-for-alcoa-2016-04-11)
erasing early gains in afternoon trade as investors braced for the
start of what's expected to be an ugly earnings season. Wall Street
is worried that poor performance in corporate results could fuel a
downdraft in stocks. Some of those fears about poor quarterly
results played out late Monday after the close of trading with
closely watched first-quarter earnings from Alcoa(AA), which posted
a 92% drop
(http://www.marketwatch.com/story/alcoa-hurt-by-weak-aluminum-prices-2016-04-11-174853616)
in profit and lowered its 2016 outlook for the aerospace market.
Its shares were down 4.4% Tuesday.
Read: Alcoa's ugly outlook is spooking Wall Street
(http://www.marketwatch.com/story/alcoas-ugly-outlook-is-spooking-wall-street-2016-04-12)
More weakness could be ahead. Many expect financial-sector
earnings to be particularly weak as banks are squeezed by the
fallout from low oil prices and low interest rates
(http://www.marketwatch.com/story/heres-why-banks-are-the-black-sheep-of-this-earnings-season-2016-04-11).
Analysts are expecting J.P. Morgan Chase & Co
(http://www.marketwatch.com/story/what-to-expect-from-jp-morgan-chase-earnings-2016-04-11).(JPM)to
report its first year-over-year earnings decline
(http://www.marketwatch.com/story/what-to-expect-from-jp-morgan-chase-earnings-2016-04-11)
in five quarters ahead of the bell on Wednesday.
Read:Here's why banks are the black sheep of this earnings
season
(http://www.marketwatch.com/story/heres-why-banks-are-the-black-sheep-of-this-earnings-season-2016-04-11)
What to watch: S&P 500 earnings for the first quarter are
forecast to slide 8.3% year-over-year, S&P Global Market
Intelligence said in a report. That would mark a third quarterly
decline in a row, it said. "Such a steep decline in growth hasn't
been recorded since Q2 2009," the report said.
Only three of the 10 S&P sectors are projected to see a rise
in earnings, with the consumer-discretionary, telecommunications
and health-care sectors leading for the fourth quarter in a row,
S&P said.
The pace of earnings releases continues to ramp up on Tuesday,
with transportation company CSX Corp. (CSX) slated to post results
after the bell.
Data and Fed speakers: Philadelphia Fed President Patrick Harker
told the Greater Philadelphia Chamber of Commerce that it makes
sense to delay another interest rate increase
(http://www.marketwatch.com/story/feds-harker-backs-delaying-another-interest-rate-hike-until-inflation-picks-up-2016-04-12)
until inflation picks ups. Harker isn't a voting member of the
Fed's policy-setting committee this year.
The NFIB small-business index slipped to a two-year low in March
(http://www.marketwatch.com/story/small-business-sentiment-falls-to-two-year-low-nfib-says-2016-04-12).
Richmond Fed President Jeffrey Lacker, another nonvoter, will
speak about "economic leadership in an uncertain world" at the
University of North Carolina at Wilmington at 4 p.m. Eastern.
The International Monetary Fund on Tuesday again lowered its
estimate for global growth. Volatile financial markets and slowing
momentum among developing economies were among the factors
(http://www.marketwatch.com/story/imf-cuts-global-growth-forecast-warns-against-nationalism-2016-04-12)
cited by the IMF.
Movers and shakers:Juniper Networks Inc.(JNPR) fell 7.1% after
the company's results for the quarter ended in March disappointed
(http://www.marketwatch.com/story/juniper-networks-cuts-guidance-for-march-quarter-2016-04-11-17485374).
Cisco Systems Inc. (CSCO), which competes directly with Juniper,
was the worst-performer among the blue-chip gauge's components and
the only Dow stock in the red.
Wholesale distributor Fastenal Co.(FAST) reported its profit was
1.1% lower in the first quarter of the year amid weakness in its
core business of making fasteners. Its shares slumped 3.1%.
Perry Ellis International Inc. (PERY) shares rose 3.2% after the
company said its margins benefited from its domestic menswear
business
(http://www.marketwatch.com/story/perry-ellis-narrows-loss-as-margins-expand-2016-04-12).
Shares of Marathon Oil Corp.(MRO) surged 13% after the oil
production company said late Monday that it plans to sell $950
million worth of assets
(http://www.marketwatch.com/story/marathon-plans-950-million-asset-sale-2016-04-11),
and vowed to focus on lower-risk U.S. resources to protect its
balance sheet against the oil price slump.
Hertz Global Holdings Inc. (HTZ) shares were down 1.1% in after
the car rental company late Monday cut its 2016 outlook on U.S. car
rental revenue
(http://www.marketwatch.com/story/hertz-cuts-2016-outlook-on-us-car-rental-revenue-2016-04-11-84852736).
Other markets: Asia markets finished mostly higher
(http://www.marketwatch.com/story/nikkei-lifted-by-weaker-yen-as-shanghai-stocks-slip-2016-04-12),
with Japan's Nikkei 225 index getting a boost from a weaker yen
(http://www.marketwatch.com/story/dollar-rises-after-japans-finance-minister-fires-a-warning-shot-over-yen-2016-04-12).
The dollar advanced against its main rivals
(http://www.marketwatch.com/story/dollar-rises-after-japans-finance-minister-fires-a-warning-shot-over-yen-2016-04-12).
Gold prices were little-changed.
European stocks finished higher on Tuesday,
(http://www.marketwatch.com/story/european-stocks-choppy-as-italian-banks-rise-luxury-shares-pull-back-2016-04-12)
rising for a third session as the Stoxx Europe 600 Index closed up
0.5%.
--Sara Sjolin contributed to this article.
(END) Dow Jones Newswires
April 12, 2016 15:10 ET (19:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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