By Ellie Ismailidou and Carla Mozee, MarketWatch
Analysts looking at the 18,000 psychological level for the
Dow
The Dow industrials and the S&P 500 climbed Wednesday toward
fresh multi-month highs, buoyed by a rally in crude-oil prices to
above $51 a barrel and a dollar that's hovering around a one-month
low.
The Dow briefly topped the psychologically important 18,000
level, while the S&P remained firmly above the 2,100-point
level -- both significant technical indicators that, according to
analysts, could determine whether the main benchmarks will push
toward fresh all-time highs.
The S&P 500 gained 5 points, or 0.2%, to 2,117, moving less
than 1% off its record of 2,130.82, set May 21, 2015.
Materials and industrial shares led gains, up 0.8% and 0.7%
respectively. The only two sectors in negative territory were
telecom and consumer discretionary, down 0.5% and less than 0.1%,
respectively.
The Dow Jones Industrial Average added 49 points, or 0.3%, to
17,986, led by a 2.1% rise in shares of Caterpillar Inc.(CAT) and a
1.4% gain in UnitedHealth Group Inc.(UNH).
Analysts focused on the 18,000-point level as a significant
technical indicator for the Dow, after the blue-chip gauge briefly
broke above that level on Tuesday for the first time since April
and continued to flirt with that number on Wednesday.
Meanwhile, the Nasdaq Composite was up 5 points, or 0.1%, at
4,966.
The equity market resumed its strong correlation with moves in
oil prices in the last few sessions, said J.J. Kinahan, chief
strategist at TD Ameritrade.
Oil prices
(http://www.marketwatch.com/story/oil-prices-march-past-50-amid-signs-of-us-inventory-falls-2016-06-08)
traded above $51 a barrel -- a nearly 11-month high -- after data
from the Energy Information Administration showed that inventories
fell
(http://www.marketwatch.com/story/oil-maintains-strong-gains-as-inventories-decline-in-line-with-forecasts-2016-06-08)
roughly in line with expectations. Earlier data showed crude
imports into China
(http://www.marketwatch.com/story/china-crude-imports-remain-robust-on-demand-surge-2016-06-08)
rose 39% in May from the year-ago period, in part on demand from
privately owned refineries.
The correlation between oil and stocks had somewhat eased in the
last two months, falling from the peak reached in February and
March, Kinahan said. But it has reappeared recently, after Federal
Reserve Chief Janet Yellen said Monday the next interest-rate hike
might be pushed back.
Amid tumbling rate-hike expectations, "oil is something to trade
on after the Fed is out," Kinahan said.
Still, "it has been a slow crawl higher in the wake of last
Friday's U.S. employment report and the subsequent dovish tone to
Yellen's speech on Monday," said Simon Smith, chief economist at
FxPro, in a note.
"Once again, this demonstrates the waning impact that low rates
and monetary policy in general is having on stocks and asset
markets in general," he added.
On Wednesday, investors seemed to shrug off news that companies
had a record number of open jobs in April
(http://www.marketwatch.com/story/companies-scale-back-pace-of-hiring-even-as-job-openings-match-record-2016-06-08).
But the tumbling dollar
(http://www.marketwatch.com/story/dollar-reverses-some-of-rebound-shifts-lower-against-yen-euro-2016-06-08),
which weakened Wednesday to its lowest level in a month, boosted
investor appetite for stocks, said John Conlon, chief equity
strategist at People's United Wealth Management. That's largely
because a weakening buck is expected to boost U.S. corporate
earnings after the dollar's strength battered corporate earnings,
especially among exporters, over recent quarters, Conlon added.
Stocks to watch: Lululemon Athletica Inc. (LULU) shares were up
2% after falling in premarket trade. The yoga-wear retailer
reported earnings and gave a second-quarter sales forecast
(http://www.marketwatch.com/story/lululemon-revenue-tops-views-offers-soft-outlook-2016-06-08)
that was largely below expectations.
UnitedHealth Group Inc.(UNH) gained 1.4% after the company
raised its quarterly dividend by 25%
(http://www.marketwatch.com/story/unitedhealth-raises-dividend-25-2016-06-08).
Amazon.com Inc.(AMZN) inched higher by 0.1% after the company
announced plans to invest $3 billion in India
(http://www.marketwatch.com/story/amazon-plans-3-billion-investment-in-india-2016-06-08),
with CEO Jeff Bezos saying he sees "huge potential" in the
economy.
Yahoo Inc. (YHOO) was up 0.8% after the company said it is
aiming to raise $1 billion
(http://www.marketwatch.com/story/yahoo-seeks-to-raise-1-billion-in-patent-auction-2016-06-07)
in an auction of about 3,000 patents.
Dave & Buster's Entertainment Inc. (PLAY) jumped 8.5% after
late Tuesday the company raised its yearly outlook
(http://www.marketwatch.com/story/dave-busters-lifts-guidance-outlines-buyback-2016-06-07-17485617)
and said its board approved a $100 million share buyback plan.
Gevo Inc's.(GEVO) share skyrocketed by 96% after the company
said Tuesday the first two commercial flights using its renewable
alcohol-to-jet fuel technology were flown by Alaska Airlines
(ALK).
Verint Systems Inc.(VRNT) inched higher by 0.5% after late
Tuesday it posted a wider quarterly loss
(http://www.marketwatch.com/story/verint-systems-posts-wider-loss-2016-06-07-17485298).
The software and services company also reaffirmed its outlook for
the year ending January 2017.
Catabasis Pharmaceuticals Inc. shares(CATB) plummeted 26% after
the biotech company said its cholesterol treatment missed its study
goal
(http://www.marketwatch.com/story/catabasis-shares-halted-as-cholesterol-drug-misses-study-goal-2016-06-07).
Other markets:Asian stocks were mixed
(http://www.marketwatch.com/story/china-stocks-retreat-as-investors-brace-for-data-japan-stocks-higher-2016-06-08),
with Japan's Nikkei Average up 0.9%, but the Shanghai Composite
down 0.3%.
The dollar index was down 0.4%, while gold futures were up over
1%.
European stocks moved lower. Attention was turning to the bond
market as the European Central Bank began purchasing corporate
bonds
(http://www.marketwatch.com/story/stock-futures-higher-as-oil-prices-rise-us-interest-rate-hikes-pushed-out-2016-06-07).
(END) Dow Jones Newswires
June 08, 2016 11:15 ET (15:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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