By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Oil reverses gains; Treasury yields rise
After uncertain morning trade, U.S. stocks pushed higher, with
the S&P 500 and Dow industrials hitting fresh intraday
records.
Investors weighed the implications of dovish comments from a
Federal Reserve member who once again endorsed delaying an
interest-rate hike until 2016.
The S&P 500 (SPX) added 5 points, or 0.2%, to 2,128. The Dow
Jones Industrial Average (DJI) gained 20 points, or 0.1%, to
18,293. The Nasdaq Composite (RIXF) rose 20 points, or 0.4%, to
5,067.
Analysts at Bank of America Merrill Lynch in a note to investors
wrote that "until U.S. macro [data are] unambiguously robust enough
to allow the Fed to hike safely, we think investors will be cursed
by mediocre returns, volatile trading rotation & flash
crashes."
Some analysts, however, remained upbeat that the S&P 500 can
continue to build on recent highs despite a relatively tepid 2015
so far. The S&P 500 is up about 3% this year.
Fed Chicago President Charles Evans repeated his stance on
Monday that the central bank should hold back from raising
short-term interest rates this year. "It likely will not be
appropriate to begin raising the fed funds rate until sometime in
early 2016," he said in a speech prepared for delivery in Stockholm
(http://www.marketwatch.com/story/feds-evans-us-zero-rate-policy-stance-is-not-too-easy-2015-05-18).
Evans said weak first-quarter data is giving him "pause," and
he'd like to see "confirmation that they are indeed a transitory
aberration." See the full text of his speech here
(https://www.chicagofed.org/publications/speeches/2015/05-15-exercising-caution-in-normalizing-monetary-policy).
Investors will get a closer look at the central bank's thoughts
about interest rates and economic data when the minutes of the
Federal Open Market Committee's April 29 meeting are released on
Wednesday.
In economic news, a gauge of confidence among home builders
declined
(http://www.marketwatch.com/story/home-builder-confidence-declines-two-points-to-54-in-may-2015-05-18-109101)
two points to 54 in May, missing analysts expectations. The decline
was led down by views on current sales of single-family homes,
according to National Association of Home Builders/Wells Fargo data
released Monday.
Also read: Need to know: Stocks take aim at another record high
even as a 'Great Reset' looms
(http://www.marketwatch.com/story/stocks-take-aim-at-another-record-high-even-as-a-great-reset-looms-2015-05-18)
S&P 500 is headed higher still? The S&P 500's move to a
new all-time high last week came just as the index looked to be
losing momentum, noted Bill McNamara, technical analyst at Charles
Stanley. "It is still too early to talk in terms of a 'breakout',
but the rebound following the minor break of the short-term uptrend
looks quite positive for the moment, and could even push U.S.
stocks a bit higher in the near term," he said.
Of course, given the resurgence of volatility in forex and bond
markets, it is a tougher market to call and it can't be dismissed
that the index could revisit the recent low at 2,080 again,
McNamara said in a note dated May 18.
Katie Stockton, chief technical strategist for BTIG, is now
targeting a short-term move to around 2,180 for the S&P 500 on
the heels of Friday's moves. "We expect upside follow-through as
investors shy away from selling in May. Pullbacks are always
possible, but the path of least resistance is higher," she said in
a note dated May 17.
Stocks to watch: Retailers will be in focus this week, with
earnings from Urban Outfitters Inc.(URBN) on Monday, Wal-Mart
Stores Inc.(WMT) and Home Depot Inc.(HD) on Tuesday, and Target on
Wednesday, to name a few.
Read: Big retailers cap earnings season against backdrop of weak
sales
(http://www.marketwatch.com/story/big-retailers-cap-earnings-season-against-backdrop-of-weak-sales-2015-05-15)
Also read: Target puts some food suppliers on the back burner
(http://www.marketwatch.com/story/target-puts-some-food-suppliers-on-the-back-burner-2015-05-18)
(http://www.marketwatch.com/story/target-puts-some-food-suppliers-on-the-back-burner-2015-05-18)Shares
of (ANN) Ann Inc. soared 21% after the company received a buyout
offer
(http://www.marketwatch.com/story/anns-stock-soars-after-buyout-deal-with-ascena-retail-group-2015-05-18)
from AscenaRetail Group Inc. (ASNA) in a deal valuing the women's
retail apparel store at $2 billion.
Shares of Endo International PLC (ENDP) fell 2.9% after the
company said it would buy privately held Par Pharmaceutical in an
$8 billion deal.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/urban-outfitters-agilent-earnings-in-focus-2015-05-18).
Other markets: Treasury prices declined Monday, pushing yields
higher, with the 10-year yield up 8 basis points to 2.23% as the
Treasury market continued to feel pressure from a selloff in
eurozone government bonds
European stocks reversed earlier gains and pushed lower. The
Nikkei 225 index rose, but Chinese stocks closed lower .
Oil reversed earlier gains
(http://www.marketwatch.com/story/oil-prices-rangebound-as-opec-meeting-draws-nearer-2015-05-18),
falling below $60 a barrel for West Texas Intermediate crude
(CLM5).
Read: Oil is at a make-or-break crossroads
(http://www.marketwatch.com/story/oil-is-at-a-make-or-break-level-2015-05-18)
(http://www.marketwatch.com/story/oil-is-at-a-make-or-break-level-2015-05-18)Gold
prices (GCM5) moved moderately higher, while the dollar
(http://www.marketwatch.com/story/dollar-up-against-yen-but-lacks-momentum-2015-05-18-21033538)(DXY)
rose against the yen, but fell slightly against the euro.
Read: Peter Schiff, more bullish than ever, sees gold headed to
$5,000
(http://www.marketwatch.com/story/peter-schiff-more-bullish-than-ever-sees-gold-headed-to-5000-an-oz-2015-05-15)
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