By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Goldman analysts: We are in a period of 'indigestion'
NEW YORK (MarketWatch)--U.S. stocks edged higher on Wednesday,
recovering some lost ground after the dollar ascent triggered the
worst loss for the Dow in five months.
The Dow Jones Industrial Average (DJI) ticked higher with about
two-thirds of its 30 components trading higher. The S&P 500
index (SPX) inched higher with five of its 10 main sectors trading
in the green. The Nasdaq Composite (RIXF) advanced gingerly.
Tuesday's steep losses erased year-to-date gains for the S&P
500 and the Dow industrials. The indexes are still negative for the
year.
"The reality is that the market will never be fully ready for
hike in the interest rate, because it is an addiction of cheap
money, which investors are used to, and they are not going to be
happy if you pull that plug," said Naeem Aslam, chief market
analyst at AvaTrade, in a note. "So in short, Miss Yellen will just
have to be strong armed and pull the plug, just like she did with
her tapering decision."
Also read: The blistering pace of dollar's rally is rattling
markets
(http://www.marketwatch.com/story/the-blistering-pace-of-dollars-rally-is-rattling-markets-2015-03-10)
Modest gains for stocks on Wednesday came even as the dollar
continued to push higher against rivals, with the euro (EURUSD)
nearing a 12-year low against the greenback at $1.0591.
However, some hopeful signs are emerging from Europe, where the
Stoxx Europe 600 index was up about 1% as the third day of the
European Central Bank's bond-buying program got under way.
Investors will be watching Greece as technical talks between the
country's officials and its creditors begin.
In Asia, the Hong Kong Hang Seng Index hit a two-month low on
weak China economic data
(http://www.marketwatch.com/story/hong-kong-stocks-fall-to-two-month-low-on-weak-china-data-2015-03-11),
though Japan stocks rebounded.
Read: S&P 500 teeters on major technical support
(http://www.marketwatch.com/story/sp-500-teeters-on-major-technical-support-2015-03-10-121031632)
(http://www.marketwatch.com/story/sp-500-teeters-on-major-technical-support-2015-03-10-121031632)'Indigestion'
ahead for markets? The reasoning behind the sharp turn for markets
took some by surprise, though analysts remained sanguine that the
market would eventually calm down. Goldman analysts Noah Weisberger
and Aleksandar Timcenko have said, they expected a near-term source
of U.S. headwinds would be growth concerns.
"But winds have shifted with a looming U.S. tightening as the
current source of market disquiet, which we also think will
ultimately prove benign, though perhaps after some period of
'indigestion'," they said in a note Tuesday.
Stocks to watch: Express (EXPR) shares rallied after the company
gave an upbeat outlook for its current quarter and delivered
holiday-quarter results that topped expectations.
Vera Bradley Inc. (VRA) stock tumbled gave a dismal forecast for
its current quarter and new fiscal year.
Shares of VeriFone Systems Inc. (PAY)surged after the company
late Tuesday reported earnings and revenue that topped Wall
Street's forecasts.
Other markets: Gold (GCJ5) fell further as the dollar charged
ahead.
Oil prices
(http://www.marketwatch.com/story/oil-futures-rebound-ahead-of-us-oil-stockpile-data-2015-03-11)(CLJ5)
gave up earlier gains with the West Texas Intermediate futures
little changed at $48.24 a barrel.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires