MARKET SNAPSHOT: Stocks Stage Tentative Rebound As Traders Try To Shake Off Rising Yields, Geopolitics
17 May 2018 - 1:36AM
Dow Jones News
By Victor Reklaitis and Anora M. Gaudiano, MarketWatch
Analyst: 'Markets reflect a balance between risk and reward'
U.S. stocks edged higher on Wednesday morning, as investors
appeared to have shaken off fresh North Korea worries as well as
rising bond yields.
Pyongyang overnight signaled its leader, Kim Jong Un, might pull
out of next month's summit
(http://www.marketwatch.com/story/north-korea-threatens-to-call-off-us-summit-if-washington-insists-on-denuclearization-2018-05-16)
with President Donald Trump if the U.S. insists on denuclearization
for the isolated nation.
What are the main benchmarks doing?
The equity market has scored significant gains so far this
month, but it suffered a sizable drop on Tuesday, as the Dow halted
an eight-session winning streak
(http://www.marketwatch.com/story/dows-8-session-win-streak-in-jeopardy-as-us-stock-futures-dip-2018-05-15).
On Wednesday, The Dow Jones Industrial Average was flat at
24,705.
The S&P 500 index was up 4 points, or 0.2%, to 2,715, with
seven of its 11 main sectors trading higher. Materials, consumer
staples and consumer discretionary stocks were leading gains.
Meanwhile, the Nasdaq Composite advanced 25 points, or 0.3%, to
7,376.
What's driving markets?
The stock market seems to have turned a corner this month
(http://www.marketwatch.com/story/stock-market-turns-corner-as-most-risks-are-already-priced-in-2018-05-12),
overcoming some concerns about inflation, rising interest rates,
trade fights and geopolitical tensions. The Dow is up 2.2% in May
so far and roughly flat for the year.
Even so, rising rates appear to be peeling some investors away
from stocks. Tuesday's selloff was blamed in part on the 10-year
Treasury note's yield rise to a seven-year high above 3%
(http://www.marketwatch.com/story/10-year-treasury-yield-creeps-back-above-3-2018-05-15).
The 10-year yield rose 1 basis point on Wednesday to trade at
3.0862%.
What are strategists saying?
"Recent market action reflects a balance between risk and reward
for investors. On the positive side, there is still growth momentum
and solid earnings. But these are counterbalanced with risks on
policy issues, trade talks and geopolitics like North Korea," said
Lisa Erickson, head of the traditional investments group at U.S.
Bank Wealth Management.
Geopolitical risks are "rising again as North Korea pulls out of
planned talks with South Korea and threatens to do the same with
Donald Trump," said Richard Perry, a Hantec Markets analyst, in a
note.
"Kim Jong Un is apparently unhappy over the denuclearization
program. As yet, there has only been a minor safe-haven move,"
Perry added.
What economic news is on tap?
Construction on new houses
(http://www.marketwatch.com/story/housing-starts-drop-37-in-april-but-stick-near-11-year-high-2018-05-16)dropped
3.7% in April. The annual rate of new homes being built declined to
1.29 million last month from a revised 1.34 million pace in March
that was the strongest since mid-2007.
Industrial production rose 0.7% in April
(http://www.marketwatch.com/story/industrial-output-climbs-07-in-april-2018-05-16),
slightly above Wall expectations of a 0.6% increase.
Check out:MarketWatch's Economic Calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
Which stocks are in focus?
Shares in Macy's Inc.(M) jumped 8% after the retailer reported
upbeat sales and outlook.
See:Macy's stock is rising but same-store sales are not
(http://www.marketwatch.com/story/macys-earnings-shares-are-rising-but-same-store-sales-are-not-2018-05-14)
Shares of Micron Technology Inc.(MU) are up 3.5% in premarket
trading after RBC analyst Amit Daryanani initiated coverage of the
stock with an outperform rating and an $80 price target.
What are other markets doing?
Gold futures were roughly unchanged after earlier trading
higher.
European stocks were struggling for direction, while Asian
markets finished flat to lower
(http://www.marketwatch.com/story/asian-markets-slump-amid-new-worries-from-north-korea-2018-05-15).
Oil futures lost ground, and the ICE U.S. Dollar Index was
gaining.
(END) Dow Jones Newswires
May 16, 2018 11:21 ET (15:21 GMT)
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