By Kate Gibson
Recent strength in commodity prices and weakness in the U.S.
dollar were among the factors that had stock-market investors
fleeing on Monday to the materials sector, which also benefited
from brighter forecasts for global economic growth.
Improving expectations for global growth is "a strong positive
for a sector that relies heavily on export growth," Oppenheimer
equity analysts Brian Belski and Nicholas Roccanova wrote in a
note.
Material shares fronted Monday's gains, with chemical giant Dow
Chemical Co. (DOW) rising 6.9%, while packaging maker Sealed Air
Corp. (SEE) and lumber giant Weyerhaeuser Co. (WY) were among the
session's top performers, both up roughly 6%.
Reversing course in afternoon trades, the major indexes erased
earlier declines and crossed into positive territory. The Dow Jones
Industrial Average (DJI) gained 21.39 points, or 0.2%, to end at
9,626.8. The S&P 500 Index (SPX) climbed 6.61 points, or 0.6%,
to 1,049.34, while the Nasdaq Composite Index (RIXF) gained 10.88
points, or 0.5%, to 2,091.78.
For the year to date, materials are up 34.1%, outperforming the
broader market, which had the S&P 500 ahead 15.4% as of
Friday's close.
"Once again, the market is beginning to rotate investment
groups, from the financials to the materials. Materials and the
technology sectors have been among the top groups since late [in
the] second quarter and continue to do so today, again as investors
expect real and lasting economic recovery," said Paul Nolte,
director of investments, Hinsdale Associates.
Crude futures in recent months have traded between $65 and $75 a
barrel as the market looked to increased demand on expectations of
a global recovery. On Monday, oil futures lapsed below $69 a
barrel, while shares of natural gas jumped more than 11%. .
"We believe the correction in the local Chinese equity market is
an early sign of pending correction in commodities along with
materials," wrote Bank of America Merrill Lynch research analysts
Mary Ann Bartels and Stephen Suttmeier.
Gold miner Goldcorp. (GG) made Bank of America's latest "most
attractive buy" list, which identifies common stocks viewed as
attractive on technical analysis. .