Stocks rebound after Monday's dive; Dow ends run of triple-digit moves
By: Kate Gibson | Markets Writer
Pisani: Being oversold isn't good enough
CNBC's Bob Pisani breaks down the "oversold" market and looks at the historic levels of the volatility index.
U.S. stocks rose on Tuesday, with
equities regaining some footing after the prior day's rout that shaved
more than 300 points off the Dow Jones Industrial Average.
"Today is just a bounce. I don't think there is really that much behind it, other than some bargain hunters stepping in," said Robert Pavlik, chief market strategist at Banyan Partners.
Starting with the manufacturing report out a China a few weeks ago, and continuing with trouble in other emerging-market countries including Turkey and Argentina, "put it all together, and it's a good excuse to sell some stocks and get this correction going," said Pavlik, who believes the decline did not end with Monday's rout.
Equities maintained their gains after data had factory orders falling 1.5 percent in December after a 1.5 percent gain in November.
Economic reports on Wednesday were more likely to be market moving, with the ADP employment report coming ahead of Friday's nonfarm payrolls report for January.
Another report on the services sector could shed light on a portion of the economy that is less sensitive to weather.
Microsoft shares climbed after it named Satya Nadella as its chief executive officer. Yum Brands rose after the fast-food retailer posted quarter profit that exceeded expectations.
Michael Kors Holdings surged after the handbag and accessories retailer hiked its profit and sales outlook. J.C. Penney shares fell sharply, turning course on premarket gains, after the retailer reported a modest gain in quarterly comparable sales but offered no details on gross profit margin. JPMorgan and Sterne Agee reduced the target price of the stock.
"There is some discretionary spending going on, if there is a company that personifies discretionary spending," said Pavlik of the results posted by Michael Kors.
"Today is just a bounce. I don't think there is really that much behind it, other than some bargain hunters stepping in," said Robert Pavlik, chief market strategist at Banyan Partners.
Starting with the manufacturing report out a China a few weeks ago, and continuing with trouble in other emerging-market countries including Turkey and Argentina, "put it all together, and it's a good excuse to sell some stocks and get this correction going," said Pavlik, who believes the decline did not end with Monday's rout.
Equities maintained their gains after data had factory orders falling 1.5 percent in December after a 1.5 percent gain in November.
Economic reports on Wednesday were more likely to be market moving, with the ADP employment report coming ahead of Friday's nonfarm payrolls report for January.
Another report on the services sector could shed light on a portion of the economy that is less sensitive to weather.
Microsoft shares climbed after it named Satya Nadella as its chief executive officer. Yum Brands rose after the fast-food retailer posted quarter profit that exceeded expectations.
Michael Kors Holdings surged after the handbag and accessories retailer hiked its profit and sales outlook. J.C. Penney shares fell sharply, turning course on premarket gains, after the retailer reported a modest gain in quarterly comparable sales but offered no details on gross profit margin. JPMorgan and Sterne Agee reduced the target price of the stock.
"There is some discretionary spending going on, if there is a company that personifies discretionary spending," said Pavlik of the results posted by Michael Kors.
| Name | Price | Change | %Change | ||
|---|---|---|---|---|---|
| DJIA | Dow Jones Industrial Average | 15445.24 | 72.44 | 0.47% | |
| S&P 500 | S&P 500 Index | 1755.20 | 13.31 | 0.76% | |
| NASDAQ | Nasdaq Composite Index | 4031.52 | 34.56 | 0.86% |
After a 109-point rise, and a brief dip into negative terrain, the Dow Jones Industrial Average added 72.44 points, or 0.5 percent, to 15,445.24, and halted a four-session run of triple-digit moves, three of them to the downside.
Consumer discretionary and telecommunications fared best and utilities lagged among the 10 major sectors on the S&P 500, which gained 13.31 points, or 0.8 percent, to 1,755.20. The Nasdaq rose 34.56 points, or 0.9 percent, to 4,031.52
(Read more: Look out - Technicians see more selling)
For every share that fell, more than two gained on the New York Stock Exchange, where 836 million shares exchanged hands. Composite volume topped 4 billion.
US greenback still top dollar: Expert
Eswar Prasad, Brookings
Institution Senior Fellow, and CNBC's Steve Liesman discuss why the U.S.
dollar will continue to be the world's "go to" currency for the
foreseeable future.
The dollar edged higher against the currencies of major U.S. trading partners; the yield on the 10-year Treasury note used in figuring mortgage rates and other consumer loans rose 4 basis points to 2.625 percent.
Gold futures for April delivery fell $8.70, or 0.7 percent, to $1,251.20 an ounce and crude-oil futures gained 76 cents, or 0.8 percent, to $97.19 a barrel.
U.S. stocks were hammered on Monday after a gauge of factory activity disappointed, increasing worries about the economy ahead of Friday's monthly jobs report.
On Tuesday, Fed Bank of Richmond President Jeffrey Lacker said the drop in global equities was unlikely to divert the Federal Reserve from its tapering of monthly asset purchases.
Gold futures for April delivery fell $8.70, or 0.7 percent, to $1,251.20 an ounce and crude-oil futures gained 76 cents, or 0.8 percent, to $97.19 a barrel.
U.S. stocks were hammered on Monday after a gauge of factory activity disappointed, increasing worries about the economy ahead of Friday's monthly jobs report.
On Tuesday, Fed Bank of Richmond President Jeffrey Lacker said the drop in global equities was unlikely to divert the Federal Reserve from its tapering of monthly asset purchases.
—By CNBC's Kate Gibson
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