By Anora Mahmudova and Victor Reklaitis, MarketWatch
Freeport McMoRan rallies for seventh consecutive session
U.S. stocks bounced off session lows and resumed climb on
Wednesday, thanks to a rally in health-care stocks.
Health-care, materials and industrials were among the best
performing sectors among the S&P 500's 10 sectors. The energy
sector was modestly higher.
The Nasdaq Composite rose 22 point, or 0.5%, to 4,771, driven by
a rally in biotechs. The iShares Nasdaq Biotechnology ETF rallied
2.9%, recovering some of the Tuesday's steep losses.
Meanwhile, the S&P 500 gained about 10 points, or 0.5%, to
1,989. The S&P had been at session highs and struggling to
trade past a so-called resistance level of 2000, which market
participants say would indicate a bullish trend for stocks.
Investors "need the S&P 500 to make a run and a break
through 2,000," and that would energize other markets, said Scott
Schuberg, CEO of Rivkin Securities in Australia, in a note late
Tuesday. The U.S. stock benchmark is down 3.1% for the year.
The Dow Jones Industrial Average jumped as high as 162 points,
but was trading 56 points or 0.3%, higher at 16,849.
Earlier, the main indexes, which have been closely tracking oil
prices, dipped into negative territory, following volatile crude
futures lower.
"The energy sector rallied drastically over the past few days,
spreading optimism to broader markets and it's not surprising to
see some consolidation after big gains," said Brian Fenske, head of
sales trading at ITG.
Fenske said that gains over the past week had more to do with
unwinding of bearish positions in the energy sector.
"The trade of shorting energy stocks, particularly low-quality,
highly-leveraged companies, was overcrowded, so when oil began to
rally, investors scrambled to cover short positions, taking all
energy stocks higher," Fenske said.
Investors also focused on earnings results from companies such
as Constellation Brands Inc. (STZ) and Monsanto Co.(MON).
"Until we start seeing earnings results next week, trading will
be driven by macro news and not fundamentals," Fenske added.
Other markets: November West Texas Intermediate crude rose as
high 2% early Wednesday
(http://www.marketwatch.com/story/oil-prices-extend-gains-on-lower-us-production-2015-10-07)
but turned lower, trading down 0.7%.
Energy shares led the way higher for European early Wednesday,
but the fall in oil prices reversed those gains. Trading remains
closed for a holiday in Shanghai, and Japan's central bank kept its
monetary policy unchanged
(http://www.marketwatch.com/story/bank-of-japan-stands-pat-on-policy-despite-economic-troubles-2015-10-07).
Gold and the dollar were little changed.
Stocks to watch: Yum! Brands (YUM) shares plunged 19% for the
biggest drop among S&P 500 components after the parent company
for KFC, Pizza Hut and Taco Bell late Tuesday cut its earnings
outlook
(http://www.marketwatch.com/story/yum-brands-cuts-outlook-on-china-woes-2015-10-06-164855228)
for the year, citing a slower-than-expected recovery in China and
lingering currency issues.
Miner Freeport-McMoRan Inc. (FCX) was among the S&P's best
gainers, rallying about 11%, continuing its six-day winning streak.
Since Sep 29, the stock gained 43%, however it is still down more
than 44% since the start of the year.
Adobe Systems Inc. (ADBE) on Tuesday disappointed investors
after issuing a lower-than-expected outlook for its coming fiscal
year. Shares fell 6.5%.
Constellation Brands Inc. (STZ) shares rose 1.8% after adjusted
earnings topped expectations.
U.S. economic news: There are no top-tier U.S. economic reports
due Wednesday, and no Federal Reserve speeches expected. Minutes
from the last Fed meeting are slated to get released Thursday,
along with weekly jobless claims.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 07, 2015 14:31 ET (18:31 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.