Rebound in industrials, financials and health-care sectors stage the rally
U.S. stocks ended with strong gains on Tuesday, 15 September 2015 as the main indexes scored their third winning session in the last four. The broad-based stock rally, which accelerated late in the trading day, was led by a rebound in industrials, financials and health-care shares. Still, some attributed the sharp gains in equities as an indication that markets expect the Federal Reserve to delay interest-rate hikes at its two-day policy meeting which begins on Wednesday.
The Dow Jones Industrial Average jumped 228.89 points, or 1.4%, to 16,599.85, as 29 of the blue-chip companies ended higher. The Nasdaq Composite gained 54.76 points, or 1.1% to 4,860.52. The S&P 500 climbed 25.05 points, or 1.3% to 1,978.09, with all 10 main sectors finishing higher, led by industrials, financials and health-care stocks.
Among Dow componnets, Caterpillar and Merck led the gains, rising 2.5% and 2.3% respectively, while Walt Disney was the sole blue-chip in the red.
Mixed data over the past few months as well as market turbulences have made the task of determining the way the central bank will move difficult. Markets are also split on what a rate move might mean for markets.
Asian stock markets were mixed Tuesday, amid trepidation ahead of the FOMC meeting. China's Shanghai stock index was down 3.5% on the day, amid ongoing worries about the Chinese economy, which is the world's second-largest. Japan's Nikkei stock index was up 0.3% Tuesday after the Bank of Japan kept its monetary policy steady at its latest meeting.
In overnight news, the closely watched German ZEW economic sentiment index fell for the sixth straight month in September, at 12.1 versus 25.0 in Augusta 10-month low. This report falls into the camp of the Euro zone monetary policy doves who want the European Central Bank to initiate further monetary policy easing measures. However, there was an upbeat economic report coming out of the Euro zone Tuesday as the bloc's trade surplus widened in July to the highest level in over 10 years.
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U.S. economic data released Tuesday has little impact on market prices as it was mostly in line or not too far away with market expectations. A report on retail sales showed a modest 0.2% rise in August, matching a forecast. However, a reading of business conditions in New York in Septemberknown as the Empire State manufacturing indexwas at its lowest level since 2009. August Industrial production fell 0.4% as expected and July business inventories rose a bit less than expected.
Among stocks under focus, shares of Alcoa inched 2.6% higher after the aluminum producer reached a new supply deal with Ford Motor Co. that will expand the car maker's use of aluminum in its F-150 pickup truck and other vehicles. UPS surged 3.6% after announcing plans to hire between 90,000 and 95,000 seasonal employees to support the expected volume increase ahead of the holidays. FedEx too climbed 2.5% on the news.
Bullion prices ended the U.S. day session modestly lower on Tuesday, 15 September 2015 at Comex. prices were pressured by a climb in U.S. equities and some strength in the dollar, as traders looked to the latest U.S. economic data for clues on the Federal Reserve's decision on interest rates later this week. The focus of the world marketplace is the upcoming Federal Open Market Committee meeting on Wednesday and Thursday, in which members will discuss monetary policy. A statement and press conference from Fed Chair Janet Yellen are set for Thursday afternoon.
December gold fell $5.10, or 0.5%, to settle at $1,102.60 an ounce on Comex, giving back all of Monday's gain and then some. December silver fell 3.7 cents, or 0.3%, to $14.326 an ounce.
Oil futures recovered nearly all of the losses they suffered in the previous session as traders awaited weekly petroleum-supply figures and looked to the latest U.S. economic data for hints on the outcome of this week's meeting of Federal Reserve policy makers on Tuesday, 15 September 2015 at Nymex.
October West Texas Intermediate crude on the New York Mercantile Exchange rose 59 cents, or 1.3%, to settle at $44.59 a barrel. Prices fell 1.4% on Monday to settle at $44.
Providing some support for oil prices, data from the EIA released Monday showed that oil production from seven major U.S. shale plays is expected to fall by 80,000 barrels a day in September from August. Last week, the International Energy Agency reported that U.S. oil producers would be forced to make dramatic cuts in 2016. On Monday, Iraq's oil ministry warned international oil companies running its energy sector that it will cut spending next yearwith both the IEA and Iraq citing low crude prices.
Traders also await weekly U.S. petroleum-supply data, with a reading from the American Petroleum Institute due later Tuesday, and the more closely watched weekly report from the Energy Information Administration due Wednesday. Market forecasts a 200,000-barrel fall.
The 10-yr note settled on its low with its yield higher by nine basis points at 2.28%.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, August CPI (consensus -0.1%) will be reported at 8:30 ET, and the September NAHB Housing Market Index (consensus 61) will cross the wires at 10:00 ET.
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