U.S. Stocks Post Largest One-day Gains Since Early May

Markets Dow Jones Newswires

U.S. stocks rallied on Wednesday, with the S&P 500 and Dow industrials posting their biggest one-day gains in more than a month.

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Analysts attributed a rally on Wall Street to a one-two punch of a weaker dollar, which boosted commodities, and fresh hopes that Greece's creditors will release more bailout cash (http://www.marketwatch.com/story/merkel-hollande-willing-to-meet-greeces-tsipras-wednesday-2015-06-10).

The S&P 500 , which stood alone among the main indexes in eking out the smallest of gains Tuesday, gained 25.05 points, or 1.2%, to 2,105.20, with all of its 10 main sectors finishing higher. Technology and financial sectors led gains, rising 1.6% and 1.4% respectively. Energy-sector shares also rallied, up 1.2%, thanks to rally in oil prices.

The Dow Jones Industrial Average jumped 236.36 points, or 1.3%, to 18,000.40, turning positive for the year. The Nasdaq Composite gained 62.82 points, or 1.3% to 5,076.69.

Peter Cardillo, chief market economist at Rockwell Global Capital, said the bounce is mostly technical, but news that Greece may be reaching a deal also added to optimism.

"The market rally is mostly due to a combination of three things: the S&P 500 held its support level on Tuesday, the dollar weakened and oil rallied as well as some positive news from Greece," Cardillo said.

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James Abate, portfolio manager at Centre Funds, noted that the economy as a whole is picking up from its winter doldrums and the labor market is looking strong, however he is less convinced about stocks.

"To be bullish in this environment means we should expect [price-to-earnings] expansion and for that to happen we need to see an increase in appetite for stocks and interest rates to go down, neither of which is likely to happen," Abate said.

"We believe that market is ripe for a substantial correction, given operating margins have peaked late last year," Abate noted.

In the absence of major economic news, equity markets followed developments in currency and commodity markets. The slide in the dollar helped boost commodity prices, which in turn gave a lift to U.S. energy-related companies. A strong dollar has been seen as one of the factors hitting growth in the first quarter, so the notion that a weaker currency could help boost exports, invigorated investors.

Shares of energy companies NRG Energy, Inc.(NRG), Transocean Ltd.(RIG), and Halliburton Co.(HAL) rallied, gaining 3.2%, 1.8% and 2.2% respectively.

Shares of Target Corp.(TGT) rose 1% after the retailer late Tuesday said it would raise its quarterly dividend to 56 cents (http://www.marketwatch.com/story/target-lifts-dividend-raises-stock-buybacks-to-10-billion-2015-06-10) a share and double the amount of money available for stock buybacks to $10 billion. The company inadvertently posted a news release announcing the moves earlier in the day on its website, before quickly taking it down.

Oxford Industries Inc.(OXM) climbed 4.4% after the clothing retailer late Tuesday reported earnings that topped analyst estimates.

Shares of Netflix Inc.(NFLX) jumped 3.7% to $671.10, hitting a 52-day week high, seemingly on speculation company may announce a stock split soon.

Follow the day's big stock moves here (http://www.marketwatch.com/story/krispy-kreme-mens-wearhouse-boxs-earnings-come-into-focus-2015-06-10).

Other markets:The dollar weakened against the yen (http://www.marketwatch.com/story/yen-gets-a-boost-from-boj-kurodas-remarks-2015-06-10) after comments from Bank of Japan Gov. Haruhiko Kuroda, who suggested the Japanese currency won't fall further as the effective exchange rate is already "very weak".

The greenback bought Yen122.63, down from Yen124.35 late Tuesday in New York.

More broadly, the dollar dived against most other major currencies, with the ICE dollar index shaving off 0.6% to 94.56.

German 10-year bund yields broke above 1% (http://www.marketwatch.com/story/german-10-year-bond-yield-jumps-above-1-for-first-time-since-sept-2014-2015-06-10-491044) for the first time since September 2014, amid a wider selloff in the European and U.S. bond markets. U.S. Treasury yield also rose (http://www.marketwatch.com/story/treasurys-keep-falling-as-german-yield-tops-1-2015-06-10), with the yield on a 10-year note rising 4 basis points to 2.48%.

European stock markets closed higher (http://www.marketwatch.com/story/european-stocks-wobble-as-german-yields-spike-above-1-2015-06-10)as investors continued to monitor developments in Greece's negotiations with international lenders. Stock markets in Asia closed mixed.

Crude oil (http://www.marketwatch.com/story/oil-prices-climb-2-near-62-a-barrel-2015-06-10) settled at the highest level this year, rising 2.1% to $61.43 a barrel, after sixth straight weekly oil supply drop. Gold prices (http://www.marketwatch.com/story/gold-aims-for-third-day-of-gains-2015-06-10) rose for the third straight session, gaining 0.8% to $1,186.60 an ounce.

(By Anora Mahmudova and Sara Sjolin)