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Stocks rebound on Wall Street after poor start to trading

Published 02/06/2016

It was a good end to the day on Wall Street
It was a good end to the day on Wall Street

US stocks rebounded from an early slide on Thursday, nudging the Standard & Poor's 500 index and Nasdaq composite to their highest close of the year.

Health care companies led the comeback. Energy stocks declined the most following a meeting of Opec ministers that ended without an agreement on crude production cuts.

A late-afternoon reversal delivered the second gain in two days for the stock market in what's been a muted week of trading. Investors have been on the sidelines waiting for clues as to whether the Federal Reserve will raise its key interest rate at the central bank's next meeting of policy makers later this month.

Many will be looking to Friday, when the US Labour Department releases its latest monthly jobs report.

"It is the last major data point for the Fed to digest before they go into their mid-June meeting," said Bill Northey, chief investment officer at the US Bank Private Client Group.

The Dow Jones industrial average gained 48.89 points, or 0.3%, to 17,838.56.

The S&P 500 index added 5.93 points, or 0.3%, to 2,105.26. The last time it was higher this year was on April 20. The index is now about 1.2% below its all-time high set in May last year.

The Nasdaq rose 19.11 points, or 0.4%, to 4,971.36. That eclipsed its previous high this year on April 18.

Seven of the 10 sectors in the S&P 500 posted gains, led by health care companies. Health insurer Humana climbed the most in the index, adding 9.96 US dollars, or 5.6%, to 187.36 US dollars. Drugmaker Endo International rose 82 cents, or 4.9%, to 17.44 US dollars. And Aetna gained 4.74 US dollars, or 4.1%, to 120.03 US dollars.

Major stock indexes had been stuck in the red for much of the day as investors monitored the Opec meeting in Vienna.

Oil ministers ended the meeting without reaching a consensus on regulating supplies. That sent crude oil prices lower initially, but they later reversed course.

Benchmark U.S. crude oil rose 16 cents, or 0.3%, to close at 49.17 US dollars a barrel in New York. Brent crude, which is used to price international oils, added 32 cents, or 0.6%, to close at 50.04 US dollars a barrel in London.

"Opec taking a pause or choosing not to institute any production caps was not surprising given the fact that we've seen oil come up near $50 a barrel," Mr Northey said.

Even so, energy stocks were the biggest laggard in the S&P 500.

Shares in several oil drilling and exploration companies declined, with Diamond Offshore Drilling sliding the most. The stock lost 1.01 US dollars, or 4%, to 24.30 US dollars.

Investors also weighed the latest company earnings and deal news.

L Brands, the company behind the Victoria's Secret brand, rose 4.3% after it reported its latest sales figures. The stock added 2.92 US dollars to 71.33 US dollars.

Johnson & Johnson rose on news that the company agreed to buy privately-held hair care products maker Vogue International for about 3.3 billion US dollars. Vogue's hair care products are sold in the US and 38 other countries. Johnson & Johnson shares rose 1.71 US dollars, or 1.5%, to 114.49 US dollars.

Some companies' results put traders in a selling mood.

Conn's sank 26.3% after the retailer reported quarterly results that fell short of analysts' estimates. The stock lost $3.08 to 8.63 US dollars.

Online storage provider Box tumbled 11.5% after the company reported disappointing results late Wednesday. The stock fell 1.47 US dollars to 11.34 US dollars.

European stock indexes were mixed after the European Central Bank said that its stimulus measures are helping the economy of the 19 countries that use the euro and need time to work before any new monetary jolts are added. Germany's Dax was little changed, while France's CAC 40 fell 0.2%. Britain's FTSE 100 lost 0.1%.

In Asia, Japan's Nikkei 225 fell 2.3% after prime minister Shinzo Abe decided to postpone a sales tax hike to avoid shocks to the faltering recovery. Hong Kong's Hang Seng index rose 0.5%. Australia's S&P/ASX 200 lost 0.8%. South Korea's Kospi rose 0.1%.

In other energy futures trading, natural gas rose two cents, or 1%, to close at 2.405 US dollars per 1,000 cubic feet. Wholesale petrol rose two cents, or 1.2%, at 1.63 US dollars a gallon, and heating oil gained a penny to close at 1.51 US dollars a gallon.

US government bond prices rose. The yield on the 10-year Treasury note fell to 1.81% from 1.84 late Wednesday.

In currency markets, the dollar fell to 108.91 yen from 109.54 in the previous day's trading. The euro fell to 1.1148 US dollars from 1.1186 US dollars.

Precious and industrial metals futures closed little changed. Gold fell 2.10 US dollars to 1,212.60 US dollars an ounce, silver gained 10 cents to 16.03 US dollars an ounce and copper was flat at 2.07 US dollars a pound.

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