By Ellie Ismailidou and Sara Sjolin, MarketWatch
Facebook, Under Armour leap on strong earnings
U.S. stocks rallied in early trade, as a surge in oil prices
drove strong gains in the energy sector and overshadowed a
weaker-than-expected reading on the economy.
The S&P 500 rose 6 points, or 0.3%, at 1,888, briefly
hitting the psychologically important level of 1,900. The Dow Jones
Industrial Average was up 19 points, or 0.1%, at 15,964, after an
early gain of 120 points. The Nasdaq Composite rose 27 points, or
0.6%, at 4,494.
Crude oil futures leapt more than 5%, hitting $34.82, following
unconfirmed reports that Russia and the Organization of the
Petroleum Exporting Countries may cut output.
Join video chat: How to know when oil has hit bottom? Live video
chat with experts
(http://www.marketwatch.com/story/how-to-know-when-oil-has-hit-bottom-live-video-chat-with-experts-2016-01-27)
The news gave a boost to energy companies' stocks, with the
energy sector leading the S&P 500 after the open, up 2.7%.
Energy names were the top performers in the Dow industrials, led by
Chevron Corp. (CVX), up 3.9% Caterpillar Inc. (CAT), which makes
equipment fpr the oil and gas industry, was up 3.2%. The company on
Thursday reported fourth-quarter earnings that beat expectations,
but its sales fell short
(http://www.marketwatch.com/story/caterpillar-shares-rise-on-fourth-quarter-earnings-beat-2016-01-28).
Among other big moves in individual stocks, a 13% jump for
Facebook Inc. (FB) on the back of a well-received earnings report
(http://www.marketwatch.com/story/facebook-shares-surge-as-quarterly-profit-tops-1-billion-2016-01-27)
helped lift the Nasdaq. And shares of Under Armour Inc. (UA) jumped
12% after the athletic apparel company beat fourth-quarter profit
and revenue expectations
(http://www.marketwatch.com/story/under-armours-stock-soars-after-results-beat-expectations-upbeat-outlook-2016-01-28).
Read:It's 'impossible to deny Facebook's momentum'
(http://www.marketwatch.com/story/its-impossible-to-deny-facebooks-momentum-analyst-2016-01-28)
The oil rally outweighed a steeper-than-expected slide in orders
for durable goods that could mean the economy shrank in fourth
quarter. Orders for long-lasting goods slid 5.1% in December
(http://www.marketwatch.com/story/durable-goods-orders-slide-51-in-december-2016-01-28),
well below the 1.5% forecasted decline. That data come a day after
the Federal Reserve recognized a slowdown in the global
economy.
U.S. stocks throughout January have moved mostly in lockstep
with swings in oil as the ultralow prices were feared to trigger
defaults in the energy sector, freeze credit lines and destroy
wealth in emerging markets, such as Russia, Saudi Arabia and
Brazil.
"There's two key factors driving markets at the moment, the Fed
and oil," said Craig Erlam, senior market analyst at Oanda, in
emailed comments.
"As we've seen a lot this year already, oil can be quite
volatile and should we see it take a turn for the worse, I would
expect U.S. indexes won't be far behind," he said.
On Wednesday, U.S. stocks diverted from oil's direction and
ended lower after the latest Federal Reserve decision
(http://www.marketwatch.com/story/us-stocks-set-to-open-lower-as-investors-wait-for-fed-rate-call-2016-01-27).
The central bank, in its Wednesday policy statement, left the
door open for an interest-rate increase in March, but still hinted
that it isn't likely to tighten policy again so soon in the mist of
global economic turmoil. Investors lowered their bets of a March
rate rise after the meeting, with the CME Group federal-fund
futures
(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html)indicating
a 25% likelihood of a March hike on Thursday, down from 34% ahead
of the Fed's statement on Wednesday.
Economic data:Pending home sales eked out a small gain in
December
(http://www.marketwatch.com/story/pending-home-sales-inch-up-01-in-december-2016-01-28),
signaling moderate homebuying activity ahead, but falling short of
economists' expectations. The labor market, however, continues to
do fairly well. Initial jobless claims fell last week
(http://www.marketwatch.com/story/us-jobless-claims-fall-16000-to-278000-2016-01-28)
after touching a seven-month high earlier in January.
Movers and shakers: eBay Inc. (EBAY) tumbled 12.2% after the
online marketplace late Wednesday reported a drop in sales
(http://www.marketwatch.com/story/ebay-reports-another-drop-in-revenue-2016-01-27-164853749).
Apple Inc. (AAPL) advanced 0.1%, rebounding slightly from a 6.6%
slump on Wednesday that came after the quarterly earnings report
showed slower iPhone sales growth
(http://www.marketwatch.com/story/iphone-sales-slip-as-apples-growth-boom-ends-2016-01-26).
Alibaba Group Holding Ltd. (BABA) reversed premarket gains and
tumbling 2% after the open, after the China-based e-commerce giant
reported fiscal third-quarter profit and sales that rose above
expectations
(http://www.marketwatch.com/story/alibabas-stock-surges-after-profit-sales-beat-2016-01-28).
(http://www.marketwatch.com/story/caterpillar-shares-rise-on-fourth-quarter-earnings-beat-2016-01-28)Time
Warner Cable Inc. (TWC) was up 0.7% after the company reported
sales and profit ahead of expectations.
Drugmaker Eli Lilly & Co. (LLY) was down 2.5% after the
drugmaker reported adjusted earnings that met Wall Street's
forecast
(http://www.marketwatch.com/story/eli-lilly-meets-earnings-forecasts-sticks-to-2016-guidelines-2016-01-28),
though revenue fell slightly short.
Ford Motor Co. (F) shares reversed premarket gains, tumbling
3.1% after the car maker swung to a profit
(http://www.marketwatch.com/story/ford-swings-to-profit-on-strength-in-namerica-2016-01-28)
in the fourth quarter.
After the closing bell, Amazon.com Inc. (AMZN), Visa Inc. (V)
and Microsoft Corp. (MSFT) are expected to report earnings.
Other markets: Chinese stocks closed at the lowest level in over
a year, as investors digested the Fed statement. Other Asian
markets closed mixed
(http://www.marketwatch.com/story/asian-stocks-unsettled-as-markets-ponder-fed-statement-2016-01-27).
Markets in Europe
(http://www.marketwatch.com/story/european-stocks-fall-as-earnings-fed-weigh-2016-01-28)
were covered in a sea of red, with several heavyweight companies
adding pressure after announcing results.
Gold inched higher, while the dollar dropped against most other
currencies.
(http://www.marketwatch.com/story/dollar-could-head-towards-116-if-bank-of-japan-does-nothing-friday-2016-01-28)
(END) Dow Jones Newswires
January 28, 2016 11:30 ET (16:30 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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