By Leslie Josephs
U.S. stocks rose Tuesday as investors bought shares of consumer,
technology and health-care companies.
The Dow Jones Industrial Average added 118 points, or 0.7%, at
16516. The S&P 500 gained 0.8%, while the Nasdaq Composite rose
1%.
Major indexes swung between gains and losses several times
during the session.
"It feels like to me that the panic selling is starting to
abate," said Jeffrey Yu, head of single-stock derivatives trading
at UBS AG.
Even with the rebound, the S&P 500 is down 5.2% this
year.
The S&P 500's index of technology companies led the index
higher with a 1.2% gain, followed by slightly smaller rise in
health-care companies.
Still, oil dipped below $30 a barrel, and many energy companies
slipped, even after broader indexes recovered.
Williams Cos. fell 12% to $16.54 and Southwestern Energy Co.
fell 9.2% to $5.94.
Seven of the 10 biggest laggards in the S&P 500 Tuesday were
energy companies, as many investors stayed away from battered
energy shares.
"I wouldn't want to be premature in investing my clients' money
in anticipation of a turnaround," said Jim Margard, a senior
portfolio manager at Rainier Investment Management, which he says
has about $3.4 billion in assets under management.
While lower oil prices are traditionally viewed as a boon for
consumers and the economy more broadly, recent moves downward have
raised the specter of bankruptcies in the energy sector, weighing
on broader indexes.
Overnight, before U.S. trading began, Chinese stocks managed to
eke out a gain. Sharp declines in Chinese shares have rattled
global markets this year.
"China had a considerably less volatile session than we had the
last several weeks so that helped calm sentiment a bit, but this
decline that started out of China continues to persist," said Ryan
Larson, head of U.S. equity trading for RBC Global Asset
Management. "China is still slowing, and oil is now flirting with
$30."
The Shanghai Composite inched up 0.2% after swinging between
gains and losses during the session.
A stronger dollar and failure to stem a global glut of supply
have weighed on oil prices in recent months, while mounting
concerns about China's slowing growth have magnified fears about
demand from the world's second-largest economy.
Traditional haven assets lost a bit of ground Tuesday. Gold fell
1% to $1,085.60 an ounce.
In currencies, the dollar was up 0.3% against the yen at
Yen117.9530, while the euro was down 0.2% against the dollar at
$1.0837.
The British pound fell 0.8% against the dollar to $1.4434, its
lowest level since 2010, as unexpectedly weak U.K. industrial data
added to concerns about the manufacturing sector. The Bank of
England will hold its first policy meeting of the year this week,
and economists forecast no change to benchmark interest rates.
Aluminum maker Alcoa reported a loss after the market closed on
Monday . Shares dropped 9% to $7.28.
Corporate profits are expected to take a hit from the stronger
dollar, slowing Chinese growth and sliding oil prices.
Investors are eyeing fourth-quarter earnings in hopes that
better-than-expected corporate results may help buoy stocks.
However, some remain wary of whether earnings will deliver.
"Valuations have been on the higher side...so it leaves us in a
bit of a precarious position," said Eric Wiegand, senior portfolio
manager at U.S. Bank Wealth Management. "If we don't see the
earnings growth to support that, we could see again an environment
of enhanced volatility," he added.
The S&P 500 recently traded at 17.4 times the past 12 months
of earnings, higher than its 10-year average of 15.7, according to
FactSet.
The moves in U.S. stocks come at an uncertain time for the
Federal Reserve, which is watching economic data closely as it
considers the path for raising interest rates. The U.S. economy
likely will withstand financial market volatility if it doesn't
last too long, allowing more interest-rate increases this year,
Federal Reserve Bank of Atlanta President Dennis Lockhart said
Monday.
Corrie Driebusch and Saumya Vaishamayan contributed to this
article
Write to Leslie Josephs at leslie.josephs@wsj.com
(END) Dow Jones Newswires
January 12, 2016 16:24 ET (21:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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