By Anora M. Gaudiano and Victor Reklaitis, MarketWatch
Dick's Sporting Goods jumps, Michael Kors skids
U.S. stocks rose sharply on Wednesday, with the main indexes
recovering nearly all of the losses from the previous session amid
a run-up in oil prices and energy-related shares.
Investors also appeared to shrug off the risk that Italy's
latest political drama posed to global markets, a day after news of
a possible election sent global markets reeling.
See:Italy's crisis may be a buying opportunity for stock
investors
(http://www.marketwatch.com/story/why-italys-crisis-could-be-a-buying-opportunity-for-stock-investors-2018-05-29)
What are the main benchmarks doing?
The Dow Jones Industrial Average rose 331 points, or 1.4%, to
24,693, following Tuesday's 392-point drop. Shares of Exxon Mobil
Corp. (XOM) and Chevron Corp. (CVX), were among the blue-chip
gauge's best performers amid reports that the oil producers led by
OPEC may not soon add ramp up output.
The S&P 500 added 37 points, or 1.4%, to 2,727, recovering
all of the losses from Tuesday's drop. Gains were broad-based with
all 11 main sectors trading higher. Energy shares led the gains, up
3.3% thanks to rising oil prices. Health-care and financials shares
were up more than 1%.
The Nasdaq Composite advanced 73 points, or 1%, to 7,469.
The Russell 2000 index of small stocks hit an all-time high,
rising 27 points, or 1.7%, to 1,650.
A measure of volatility--Cboe Volatility Index fell 14% to
14.65, after spiking 29% on Tuesday.
What's driving markets?
A Reuters report
(https://www.fxstreet.com/news/saudi-arabia-opec-and-non-opec-producers-to-continue-cooperation-until-end-of-2018-reuters-201805301453)indicated
that output cuts implemented by members of the Organization of the
Petroleum Exporting Countries and nonmembers led by Russia will
remain in place
(http://www.marketwatch.com/story/oil-prices-rally-on-reports-that-opec-will-keep-its-output-curbs-in-place-2018-05-30),
sending oil prices sharply higher. Prices had been pressured in
recent sessions amid expectations that OPEC would decide to lift
production to help offset output losses from Iran and
Venezuela.
Global equities and other assets generally perceived as risky
found their footing Wednesday, as traders focus on what Italy's
politicians might deliver next. Italy's stocks and bonds, as well
as the euro, are all in recovery mode.
A coalition government led by antiestablishment parties might be
in the cards again for Italy
(http://www.marketwatch.com/story/italys-antiestablishment-parties-revive-coalition-talks-reports-2018-05-30),
after it was blocked
(http://www.marketwatch.com/story/italys-new-government-hits-wall-over-choice-of-euroskeptic-economic-minister-2018-05-27)
earlier in the week.
Read:What's the latest in Italy's political drama?
(http://www.marketwatch.com/story/whats-the-latest-in-italys-political-drama-2018-05-30)
What are strategists saying?
"The fact that the market is shrugging off Italy's political
drama suggests that maybe it was a crowded trade that was being
unwound and not something more serious," said Michael Antonelli,
equity sales trader at Robert W. Baird & Co.
Antonelli said that recent spikes in volatility should remind
market participants that capital markets are very fragile.
"Anything coming from the left field can shatter markets
nowadays, so we have to brace for a long summer grind," Antonelli
said.
What are other markets doing?
Italy's FTSE MIB stock benchmark was recently up about 2%
(http://www.marketwatch.com/story/italian-stocks-stage-recovery-bid-as-political-drama-rumbles-on-2018-05-30),
while the pan-European Stoxx Europe 600 Index edged up.
The euro rose to $1.1651
(http://www.marketwatch.com/story/euro-rebounds-from-10-month-low-as-italian-political-crisis-stays-in-focus-2018-05-30)
from $1.1541 late Tuesday in New York, helping to send the ICE U.S.
Dollar Index lower.
The yield on the 10-year Treasury note was around 2.84%. On
Tuesday, the U.S. benchmark rate tumbled 16 basis points to 2.77%
(http://www.marketwatch.com/story/treasurys-rally-pushing-down-yields-as-italy-turmoil-rocks-markets-2018-05-29),
in its largest one-day drop since the U.K.'s Brexit vote in June
2016.
Gold futures
(http://www.marketwatch.com/story/gold-slips-as-risk-on-trade-returns-to-favor-stocks-2018-05-30)settled
higher
(http://www.marketwatch.com/story/gold-slips-as-risk-on-trade-returns-to-favor-stocks-2018-05-30),
while U.S. oil futures ended with a gain
(http://www.marketwatch.com/story/us-oil-rises-attempts-to-avoid-longest-skid-in-nearly-4-months-2018-05-30)
of 2.2%.
Which stocks are in focus?
Shares in Salesforce.com Inc.(CRM)rose 3.4% after the maker of
software for customer relationship management posted quarterly
results and an annual outlook that beat forecasts
(http://www.marketwatch.com/story/salesforce-rises-after-hours-as-earnings-yearly-outlook-top-street-views-2018-05-29).
But Michael Kors Holdings Ltd.'s stock (KORS) skidded 9.5% after
the fashion house posted its results and signaled it remains open
to making acquisitions
(http://www.marketwatch.com/story/michael-kors-tops-estimates-ceo-still-open-to-acquisitions-2018-05-30).
HP Inc.'s stock (HPQ) was higher after the maker of computers
and printers posted a revenue beat late Tuesday
(http://www.marketwatch.com/story/hp-shares-fall-after-revenue-beat-2018-05-29),
but earnings just matched forecasts.
Dick's Sporting Goods Inc.(DKS)stock jumped 22%
(http://www.marketwatch.com/story/dicks-profit-jumps-as-gun-policy-has-muted-impact-2018-05-30)
after the retailer reported first-quarter earnings and revenue that
beat expectations and raised its guidance.
DSW Inc.(DSW) shares dropped 10%, pulling back from the previous
session's 2-year closing high, after the discount shoe and
accessories retailer reported better-than-expected fiscal
first-quarter earnings and revenue, while keeping its outlook
unchanged.
Which economic reports are on tap?
The U.S. added 178,000 private-sector jobs in May
(http://www.marketwatch.com/story/us-jobs-growth-continues-in-may-as-labor-market-tightens-adp-says-2018-05-30),
payrolls processor ADP said Wednesday. April's figure, meanwhile,
was reduced by 41,000 to 163,000.
Meanwhile, the first revision of the gross domestic product
(http://www.marketwatch.com/story/us-economy-grew-slightly-slower-22-in-first-quarter-revised-gdp-figures-show-2018-05-30)showed
the U.S. economy grew a touch softer in the first quarter than
originally reported, mainly because of a slower buildup in
inventories. GDP was trimmed to an annual 2.2% pace from 2.3%.
The trade gap in goods--
(http://www.marketwatch.com/story/us-trade-deficit-falls-slightly-in-april-2018-05-30)services
are excluded--fell 0.6% to $68.2 billion from $68.6.
Check out:MarketWatch's Economic Calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
The Federal Reserve
(http://www.marketwatch.com/story/upbeat-beige-book-prognosis-of-economy-keeps-fed-on-track-for-june-rate-hike-2018-05-30)
said the U.S. grew "moderately" from late April to early May in its
latest evaluation of the economy, indicating the central bank
remains firmly on track to raise interest rates next month.
--Barbara Kollmeyer contributed to this article
(END) Dow Jones Newswires
May 30, 2018 15:04 ET (19:04 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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