Stocks rebound as dip buyers fuel reopening trade
Stocks snapped a two-day drop as dip buyers emerged, fueling a rally in companies that stand to benefit the most from an economic revival. Treasuries were little changed.
Most major groups in the S&P 500 rose, with raw-material, energy and industrial shares leading the charge. A gauge of small caps climbed more than 2%, outperforming major benchmarks. CSX Corp. paced gains in the Dow Jones Transportation Average after a strong revenue outlook. Netflix Inc. tumbled on disappointing subscriber figures. The Canadian dollar advanced as the nation's central bank said it'll pare back asset purchases and move up its expected timeline for potential rate hikes.
Equities rebounded as traders sifted through corporate results for signs on whether an anticipated jump in profits would bring with it forecasts for stronger growth. Earlier losses were driven by concern over a flare-up in coronavirus cases around the world that could jeopardize an economic rebound, with stocks trading near their all-time highs.
"Investors are trying to figure out what's going to accelerate through the reopening based on earnings and guidance, while simultaneously keeping an eye on any reports of a coronavirus resurgence globally," said Mike Loukas, chief executive officer at TrueMark Investments. "It'll be a tug-of-war for direction on certain days."
Earnings season may be just the spark the Russell 2000 needs after trailing major benchmarks this month. The gauge's revenue is set to grow by 8.7%, beating the S&P 500's by 226 basis points, wrote Bloomberg Intelligence's Michael Casper and Gina Martin Adams. The small-cap index's cyclical sectors -- led by raw-material, financial and consumer-discretionary companies -- are expected to drive the sales growth, according to analysts' consensus estimates.
These are some of the main moves in markets:
Stocks
The S&P 500 climbed 0.9% at 4 p.m. EDT.
The Stoxx Europe 600 Index rose 0.7%.
The MSCI All-Country World Index gained 0.4%.
Currencies
The Bloomberg Dollar Spot Index decreased 0.1%.
The euro was little changed at $1.2034.
The Japanese yen was little changed at 108.07 per dollar.
Bonds
The yield on 10-year Treasurys fell one basis point to 1.55%.
Germany's 10-year yield was unchanged at -0.26%.
Britain's 10-year yield climbed one basis point to 0.74%.
Commodities
West Texas Intermediate crude fell 2.7% to $61 a barrel.
Gold gained 0.9% to $1,794.90 an ounce.