MARKET SNAPSHOT: U.S. Stocks Rally On Rebound In Bruised Bank, Oil Stocks
February 12 2016 - 11:51AM
Dow Jones News
By Joseph Adinolfi and Sara Sjolin, MarketWatch
U.S. shares still on track to finish with weekly loss
U.S. stocks vaulted sharply higher Friday afternoon, led by a
rebound in battered bank and energy stocks.
Advances in shares of J.P. Morgan Chase (JPM) and Goldman Sachs
Group (GS) were contributing more than 40 points to the Dow Jones
Industrial Average, after Deutsche Bank AG calmed nervous investors
by announcing that it would repurchase
(http://www.wsj.com/articles/deutsche-bank-to-buy-back-5-4-billion-in-debt-securities-1455284761)
$5.4 billion of its senior unsecured debt, analysts said.
"[Banks] are in much better shape than the market is
interpreting at this stage," said Oliver Pursche, chief executive
officer of Bruderman Brothers.
Adding to upswing were sharp gains in West Texas Intermediate
crude , soaring more than 10%, while Brent crude prices jumped
8%.
The Dow Jones Industrial Average climbed 254 points, or 1.6%, to
15,913, while the S&P 500 index gained 29 points, or 1.6%, to
1,858. Financial shares were up 3.5%, making it the best-performing
sector on the S&P, followed by energy shares, up 2.3%. Every
sector except for utilities was in the green.
Meanwhile, the Nasdaq Composite (NDAQ) rose 61 points, or 1.4%,
to 4,328.
Pursche said Friday's recovery was a repudiation of excessive
pessimism after a brutal week of trading. "Market sentiment has
gotten so bearish that it's just overdone," he said.
Stocks also benefited from a strong reading on consumer
spending. Retail sales rose 0.2% in January
(http://www.marketwatch.com/story/retail-sales-increase-02-in-january-2016-02-12),
beating expectations for a 0.1% increase from a survey of
economists polled by MarketWatch, while the decline in growth
initially reported for December was revised higher, from minus 0.1%
to 0.2%.
The retail-sales figures suggest consumer confidence is on the
rise despite the recent volatility in global stock markets.
"We've been witnessing a steady increase in consumer confidence
against a backdrop of doom and gloom," said Jack Albin, chief
investment officer at BMO Private Bank.
Stocks had an initial negative reaction to a survey from the
University of Michigan
(http://www.marketwatch.com/story/consumer-sentiment-weakens-in-february-university-of-michigan-says-2016-02-12)
showed consumer sentiment has softened in February, largely due to
a drop in its expectations component.
Despite Friday's gains, U.S. stocks will likely finish the week
in the red after Thursday's sharp selloff, when Dow industrials
ended at a two-year low
(http://www.marketwatch.com/story/dow-futures-sink-more-than-200-points-as-global-rout-gains-pace-2016-02-11)
and the S&P 500 index closed at its weakest level since April
2014.
Read: Here are 5 signs we might already be in a bear market
(http://www.marketwatch.com/story/here-are-5-signs-we-might-already-be-in-a-bear-market-2016-02-11)
A recovery in oil prices helped boost energy shares and boost
investors' appetite for risky assets, analysts said. Oil rallied
(http://www.marketwatch.com/story/oil-prices-rally-5-after-more-jawboning-from-opec-members-2016-02-12)
after the United Arab Emirates's energy minister said late Thursday
that the Organization of the Petroleum Producing Countries was
ready to cooperate on production cuts.
Other Markets: In Europe, markets also rallied
(http://www.marketwatch.com/story/european-stocks-finding-relief-but-weekly-slide-appears-intact-2016-02-12),
with the Stoxx Europe 600 index rebounding after falling to a
two-year low. The sentiment was more downbeat in Asia, where
Japan's Nikkei 225 index slumped 4.8% to end with the worst weekly
drop since 2008
(http://www.marketwatch.com/story/japan-stocks-plunge-to-lowest-point-in-more-than-a-year-2016-02-11).
Gold gave up some gains
(http://www.marketwatch.com/story/gold-prices-slip-as-investors-embrace-risk-assets-2016-02-12)after
it jumped to its highest finish in a year
(http://www.marketwatch.com/story/gold-jumps-to-1-year-high-as-global-market-rout-spurs-safe-haven-buying-2016-02-11)
on Thursday. The dollar advanced against the euro and the yen .
Fed: New York Fed President William Dudley said the U.S. economy
is well-suited to absorb any shocks that might come along during a
speech on household borrowing and indebtedness.
Read: Have central banks lost market credibility?
(http://www.marketwatch.com/story/is-this-the-week-central-banks-lost-their-market-credibility-2016-02-11)
Movers and shakers: Shares of J.P. Morgan Chase & Co.
climbed after CEO Jamie Dimon bought 500,000 of his bank's shares
for $26 million
(http://www.marketwatch.com/story/ceo-jamie-dimon-bets-on-jp-morgan-chase-to-the-tune-of-26-million-2016-02-11)
on Thursday. The purchase is meant to stem the negative sentiment
clobbering bank stocks this year.
Groupon Inc.(GRPN) leapt more than 20% after it beat
expectations
(http://www.marketwatch.com/story/groupon-swings-to-loss-results-beat-projections-2016-02-11)
late Thursday.
Pandora Media Inc.(P) rose Friday after falling Thursday as
investors disapproved of plans to invest in an on-demand music
service
(http://www.marketwatch.com/story/pandoras-spending-plans-dismay-investors-2016-02-11).
(END) Dow Jones Newswires
February 12, 2016 11:36 ET (16:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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