By Ellie Ismailidou and Victor Reklaitis, MarketWatch
Sprint jumps 18% after strong earnings; Energy sector
bounces
U.S. stocks marched sharply higher in late-morning trade
Tuesday, as investors bought energy stocks amid a rally in oil
prices which helped deliver a lift to investor sentiment.
Meanwhile, big earnings-driven gains in market bellwethers like
Sprint Corp., Procter & Gamble Co., and 3M Co. added steam to
the stock-market rebound as Wall Street tries to find its footing
after what has so far been an awful start to 2016.
The S&P 500 gained 20 points, or 1.1%, to 1,897. The Dow
Jones Industrial Average jumped 235 points, or 1.5%, to 16,129.
Shares of 3M (MMM) up 4.6%, led blue-chip advancers, after the
industrial-goods company beat fourth-quarter earnings expectations
(http://www.marketwatch.com/story/3m-beats-fourth-quarter-earning-expectations-2016-01-26).
Meanwhile the Nasdaq Composite reversed early losses to trade up
32 points, or 0.7%, at 4,550.
Tuesday's gains mark a big turnaround for the main benchmarks,
which suffered sharp losses Monday as they tracked declines in
crude-oil prices. The S&P 500 closed 1.6% lower
(http://www.marketwatch.com/story/us-stock-futures-knocked-lower-by-slide-in-oil-prices-2016-01-25),
while the Dow lost 1.3%, or 208 points, on Monday.
The S&P 500 energy sector led gains, up 2% on the day but
down 9.4% since the beginning of the year. Energy companies
including Chesapeake Energy Corp (CHK), up 8.8%, and Dover Corp.
(DOV), up 7%, were among the biggest gainers on the S&P
500.
The energy sector buoyed the Dow industrials, with Chevron Corp.
(CVX), up 3.4%, posting the benchmark's second-best
performance.
Oil is "the main driver of risk assets nowadays," Hans
Mikkelsen, Bank of America's credit strategist said in a note.
However, "before fear turns to greed there is an intermediate stage
of short covering," he added.
Also read: What oil prices really say about the stock market's
future
(http://www.marketwatch.com/story/what-oil-prices-really-say-about-the-stock-markets-future-2016-01-26)
Analysts also speculated that part of Tuesday's rally was due to
reallocation of funds from bonds to equities.
(https://twitter.com/MarkNewtonCMT/status/691976910843154432)
The fact that the equity markets "recently dislocated, and in
some cases unjustifiably so, has created opportunities," said Ryan
Larson, head of equity trading at RBC Global Asset Management,
fueling market chatter that "money is moving back into
equities."
Some analysts warned that stock-market bulls are in a tough
spot, and stocks could make big swings between gains and
losses.
"A lot of technical damage has been done over the last few
weeks, and the bulls have their work cut out for them," said Colin
Cieszynski, chief market strategist at CMC Markets, in a note late
Monday. "Because of this, we may continue to see significant
intraday swings in both directions, creating opportunities for
short-term trading."
Read:S&P will end this year at 2,000, not 2,200, J.P.
Morgan's strategist says
(http://www.marketwatch.com/story/sp-will-end-this-year-at-2000-not-2200-jp-morgans-strategist-says-2016-01-26)
On the bright side, a November reading for the
S&P/Case-Shiller home price index showed that U.S. home prices
accelerate at their fastest pace in 16 months
(http://www.marketwatch.com/story/home-prices-accelerate-to-fastest-pace-in-16-months-in-november-spcase-shiller-2016-01-26).
The Federal Housing Finance Agency said house-price gains pushed
past their 2007 peaks
(http://www.marketwatch.com/story/house-price-gains-push-past-2007-peaks-fhfa-says-2016-01-26).
Read more: Why the stock market has established a low--but not
the low
(http://www.marketwatch.com/story/the-stock-market-has-established-a-low-but-not-the-low-these-chart-watchers-say-2016-01-25)
Other markets:Oil futures
(http://www.marketwatch.com/story/crude-prices-slide-below-30-with-traders-gloomy-about-oversupply-2016-01-26)
erased earlier losses and jumped over $31 a barrel, trading well
off its lowest levels of the day, which came amid continuing
concerns about oversupply. China's Shanghai Composite Index
finished down 6.4%
(http://www.marketwatch.com/story/asian-stocks-slide-again-on-oil-weakness-2016-01-25),
ending below 2,800 for the first time since December 2014 as
analysts cited worries about crude's overnight drop. European
stocks
(http://www.marketwatch.com/story/european-stocks-under-pressure-as-oil-sells-off-again-2016-01-26)
pared losses tracking oil's rebound, while gold futures
(http://www.marketwatch.com/story/gold-rallies-as-oil-china-jitters-fuel-safe-haven-flight-2016-01-26)
rose. The dollar rose against its main rivals.
(http://www.marketwatch.com/story/dollar-weakens-as-investors-hit-the-sidelines-ahead-of-fed-boj-meetings-2016-01-26)
Stocks to watch: Shares in Procter & Gamble Co. (PG) rose
2.9% after the consumer-goods company adjusted quarterly profit
beat Wall Street's forecasts
(http://www.marketwatch.com/story/procter-gamble-sales-bouyed-by-higher-prices-2016-01-26).
Sprint Corp.'s stock (S) soared 17.7% after the
telecommunications company reported narrower-than-expected fiscal
third-quarter loss
(http://www.marketwatch.com/story/sprints-stock-rockets-after-narrower-than-expected-loss-upbeat-outlook-2016-01-26).
DuPont Co.'s (DD) shares lost 0.3% after revenue missed
expectations
(http://www.marketwatch.com/story/duponts-quarterly-revenue-misses-wall-streets-expectations-2016-01-26).
Johnson & Johnson (JNJ) and Coach Inc. (COH) both posted
profit that topped estimates, but revenue that fell short. Coach
shares jumped 10% to lead the S&P 500, while J&J was up
1.7%.
Apple Inc. (AAPL) and AT&T Inc. (T) are among the companies
slated to report quarterly results after the market's close.
Read more: Apple earnings optimism may be 'detached from
reality'
(http://www.marketwatch.com/story/apple-earnings-optimism-may-be-detached-from-reality-2016-01-21)
(http://www.marketwatch.com/story/apple-earnings-optimism-may-be-detached-from-reality-2016-01-21)Shares
of American International Group Inc. (AIG) added 2.1% after the
insurance company said it would sell its broker-dealer network
(http://www.marketwatch.com/story/aig-to-sell-broker-dealer-network-ipo-part-of-mortgage-insurance-unit-2016-01-26),
conduct a partial spinoff of its mortgage-insurance unit and more
aggressively cut costs
Economic news: A January figure for consumer confidence topped
expectations, rising to 98.1 from 96.3 in the previous month.
The Federal Reserve is slated to begin a two-day meeting, with a
statement due Wednesday afternoon. The meeting is seen by many as a
nonevent, but other analysts have warned that slight shifts in Fed
statements often have big impact
(http://www.marketwatch.com/story/slight-shifts-in-fed-statements-often-have-big-impact-analyst-says-2016-01-25).
(http://www.marketwatch.com/story/why-ubs-says-housing-may-surprise-to-the-upside-2016-01-25)--Sara
Sjolin contributed to this article.
(END) Dow Jones Newswires
January 26, 2016 11:51 ET (16:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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