By Anora M. Gaudiano and Victor Reklaitis, MarketWatch
Dick's Sporting Goods jumps, Michael Kors skids
U.S. stocks rose sharply on Wednesday, rebounding from the
previous day's rout, as energy shares bounced back amid a rally for
oil prices and worries over Italy's political crisis faded.
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 did the main benchmarks do?
The Dow Jones Industrial Average rose 306.33 points, or 1.3%, to
close at 24,667.78, taking back most of Tuesday's 392-point drop.
Shares of Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), were the
blue-chip gauge's best performers amid reports that OPEC will keep
crude production curbs in place until at least the end of the
year.
The S&P 500 added 34.15 points, or 1.3%, to 2,724.01
recovering all of the losses from Tuesday's drop. Gains were
broad-based with all 11 main sectors finishing higher. Energy
shares led the gains, up 3.1% thanks to rising oil prices. The
financial sector rebounded 1.9%, while health-care shares rose
1.4%.
The Nasdaq Composite advanced 65.86 points, or 0.9%, to
7,462.45.
The Russell 2000 index of small stocks closed at an all-time
high, rising 22.70 points, or 1.4%, to 1,646.36.
Read:Why bulls are betting on small-cap stocks to continue their
winning ways
(http://www.marketwatch.com/story/why-bulls-are-betting-on-small-cap-stocks-to-continue-their-winning-ways-2018-05-30)
A measure of volatility -- the Cboe Volatility Index , or VIX --
fell 13% to 14.88, 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 rose.
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.
Which stocks were in focus?
Shares in Salesforce.com Inc.(CRM)rose 1.9% 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 11% after
the fashion house posted its results but investors are more
concerned with weak sales growth going forward
(http://www.marketwatch.com/story/michael-kors-shares-sink-13-on-shaky-jimmy-choo-sales-and-weak-guidance-2018-05-30).
HP Inc.'s stock (HPQ) rallied 4% 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 26%
(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 5.6%, 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 gross domestic product
(http://www.marketwatch.com/story/us-economy-grew-slightly-slower-22-in-first-quarter-revised-gdp-figures-show-2018-05-30)data
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.
What did other markets do?
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 $1.1663
(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 0.8% lower to 94.102.
The yield on the 10-year Treasury note rose 7 basis points to
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%.
--Barbara Kollmeyer contributed to this article
(END) Dow Jones Newswires
May 30, 2018 16:27 ET (20:27 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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