By Anora Mahmudova and Sara Sjolin, MarketWatch
Commodities under pressure as dollar resumes rally
U.S. stocks advanced in early trade Wednesday, recouping some of
the sharp losses the indexes suffered during the previous
session.
The S&P 500 (SPX) added 10 points, or 0.5%, to 2114, with
nearly all 10 main sectors trading higher. Health care and
technology stocks led the gains. The Dow Jones Industrial Average
(DJI) gained 90 points, or 0.5%, to 18,132. The Nasdaq Composite
(RIXF) rose 36 points, or 0.7%, to 5068.
With no major economic releases on the calendar, investors were
left to focus on earnings from retailers such as Tiffany & Co.
and Costco Wholesale Corp. as well as a continued rally in the U.S.
dollar.
"In the absence of any Greek or Fed-related news flow, I think
we'll continue to see a small reversal of yesterday's selloff. We
could see markets establish an early trading range with investors
awaiting further catalysts for the next big market move," said
Craig Erlam, senior market analyst at Oanda, in emailed
comments.
Colleen Supran, a principal at San Francisco-based Bingham,
Osborn & Scarborough, said Wednesday's bounce after a selloff
on Tuesday is just regular noise, but there are concerns over the
lack of regular volatility.
"This kind of period of very low volatility is not what's
normally expected of markets. Stocks have been creeping higher
without a correction for too long, resulting in very high
valuations. But we would still recommend a diversified portfolio
with allocation to stocks and bonds, as timing the markets rarely
works for investors," Supran said.
U.S. stocks were hard hit on Tuesday, when a sharp increase in
the dollar
(http://www.marketwatch.com/story/euro-drops-on-greek-debt-fears-dollar-nears-year-high-versus-yen-2015-05-26)
spurred global investors to dump riskier assets such as equities
and commodities. Both the S&P 500 index (SPX) and Dow Jones
Industrial Average (DJI) suffered their biggest one-day declines
(http://www.marketwatch.com/story/investors-dump-us-stock-futures-ahead-of-durable-goods-data-2015-05-26)
in three weeks. The dollar was rallying on the back of
better-than-expected economic news in recent sessions as well as
hawkish comments from Federal Reserve Chairwoman Janet Yellen on
Friday, which strengthened the view that an interest-rate hike
could come this year.
Commodities volatile: On Wednesday, energy (CLN5) and metals
prices were flat after a selloff
(http://www.marketwatch.com/storyno-meta-for-guid). However, the
dollar (DXY)resumed its march higher against most major currencies
(http://www.marketwatch.com/storyno-meta-for-guid).
Earnings: Reporting ahead of the bell, home builder Toll
Brothers Inc.(TOL) said second-quarter earnings rose 4%
(http://www.marketwatch.com/story/toll-brothers-second-quarter-earnings-rise-4-2015-05-27).
But shares fell 2.3%.
Tiffany & Co.(TIF) shares jumped 12%, as profit and sales
fell less than expected
(http://www.marketwatch.com/story/tiffany-profit-sales-fall-less-than-expected-2015-05-27).
Michael Kors Holdings Ltd.(KORS) shares plunged 19% after
quarterly profit and the outlook came in short of expectations
(http://www.marketwatch.com/story/michael-korss-stock-tumbles-after-disappointing-results-outlook-2015-05-27).
Other retailers, such as Fossil Groups, Inc. (FOSL) and Coach,
Inc. (COH) also slumped, falling more than 5%.
Costco Wholesale Corp.(COST) is due to report after the market
close.
Movers and shakers: Shares of Workday Inc. (WDAY) slumped 9.6%
after the cloud software company late Tuesday said its loss widened
in the first-quarter
(http://www.marketwatch.com/story/workday-loss-widens-but-revenue-up-57-2015-05-26).
Hormel Foods Corp.(HRL) shares rose 2.7% after the maker of Spam
late Tuesday said it would buy Applegate Farms LLC
(http://www.marketwatch.com/story/hormel-to-buy-organic-meat-maker-applegate-for-775-million-2015-05-26-171031745)
for about $775 million.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/costco-tiffany-palo-alto-networks-to-report-quarterly-results-2015-05-27).
Other markets: European stocks climbed after Tuesday's selloff,
while Asia closed mixed.
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