By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks ended Monday with modest
gains as Apple Inc., Hasbro Inc. and Tesla Motors Inc. extended a
rebound many strategists say is still fragile.
The S&P 500 (SPX) closed 2.82 points, or 0.2%, higher at
1,799.84. The benchmark index fell as much as 5.8% from its peak
before rebounding on Thursday. After Monday's modest gains, it is
2.6% below its all-time high reached on Jan 15. Health-care and
utilities led gains among the index's 10 sectors on Monday.
The Dow Jones Industrial Average (DJI) traded in negative
territory most of the session but managed to rise in the last hour
of trading and closed up 7.71 points, or 0.1%, at 15,801.79.
Travelers Cos. (TRV) and Walt Disney Co. (DIS) led gains among the
Dow's 30 stocks.
The Nasdaq Composite (RIXF) rose 22.31 points, or 0.5%, to
4,148.17.
The stock market began the session on a cautious note ahead of
Federal Reserve Chairwoman Janet Yellen's testimony on Tuesday.
Read the recap of our stock market live blog.
But stocks turned broadly higher in afternoon trading,
countering some skepticism that the market rebound started last
week will be short-lived.
Gary Thayer, chief macro strategist at Wells Fargo Advisors,
wrote that at this point it is too early to say the decline is
equities is over.
"We believe the increase in the U.S. equity market late last
week may have only been an oversold bounce after the sharp selloff
in late January and early February. Therefore, it is probably too
early to conclude that the correction in the U.S. stock market is
over," Thayer wrote in a research note.
"Sentiment could turn negative again in the weeks ahead if there
is additional negative news," he added.
Stocks rallied on Thursday and Friday as investors found
positive aspects in both jobless claims and the jobs report, even
though the number of jobs created last month fell short of
expectations.
Channing Smith, managing director at Capital Advisors, says that
this week will be critical to validate the bearish view if the
S&P 500 tests its 100-day moving average.
"In the near-term, it looks like the S&P 500 is between
50-day and 100-day moving averages. If it falls below the 100-day
moving average, then we expect more downside," Smith said.
"In the longer-term, we do not see much risk for a great
selloff, as credit spreads remain healthy and the 10-year yields
are stable. Though we are watching the emerging markets carefully,"
he added.
This week investors will focus on Fed Chairwoman Yellen's first
semi-annual monetary policy testimony to Congress, coming on
Tuesday. She is scheduled to appear before the Senate Banking
Committee on Thursday. History shows that her predecessor Ben
Bernanke has given the market a boost in the past with those
testimonies.
Leading gains on the S&P 500, Hasbro Inc. (HAS) shares rose
4.5% after the toymaker reported results.
Apple Inc. (AAPL) shares rose 1.8% after activist investor Carl
Icahn backed off a bit from some of his rhetoric regarding Apple's
share buyback efforts. In a open letter to Apple shareholders,
Icahn said he was "supportive" of Apple recently buying back $14
billion of its stock. Apple is the biggest weight on the Nasdaq
Composite and S&P 500.
Tesla Motors Co. (TSLA) rallied 5.4%, the best on the Nasdaq 100
(NDX) , ahead of earnings next week. It notched a new intraday
record just under $200.
McDonald's Corp. (MCD) said its global same-store sales improved
in January, with stronger performances in China and Europe making
up for softness in the U.S. Shares in the Dow component were 1.1%
lower.
Why McDonald's January sales report is a glass half empty
Shares in Loews Corp. (L) fell 4.3%, making it the worst
performer on the S&P 500 index. The company said its
fourth-quarter loss widened owing to impairment charges that offset
growth for its CNA Financial Corp. (CNA) unit .
Yelp Inc. (YELP) pared initial sharp gains and closed 1.9%
higher following reports that Yahoo Inc. will incorporate Yelp's
listings and reviews of local businesses into results on Yahoo's
search engine.
In other markets, European stocks closed mostly flat, Asian
stocks closed higher after last week's brutal selling. The U.S.
dollar weakened slightly against the yen, oil prices topped $100
while gold futures gained for the fourth straight session.
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