FOX Business: The Power to Prosper
Wall Street broke a five-session losing streak as concerns over China from the prior session fell by the wayside.
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The Dow Jones Industrial Average jumped 188 points, or 1.08 % to 17629. The S&P 500 gained 25 points, or 1.26 % to 2093, while the Nasdaq Composite rose 49 points, or 0.97 % to 5088.
Energy helped lead the markets higher on Tuesday; the sector rallied more than 3%, its biggest one-day gain in more than four months, as oil prices traded higher.
U.S. crude oil prices rose 0.34% to $47.73 a barrel, while Brent, the international benchmark, gave up gains, falling 0.39% to $53.08 a barrel.
Exxon (NYSE:XOM) and Chevron (NYSE:CVX) were the two biggest gainers on the Dow, each rallied 3% and 4% respectively.
Meanwhile, concerns from the prior session over the sudden and drastic selloff in Chinese equity markets waned despite another more than 1% decline overnight.
China’s Shanghai Composite index dropped 1.68%, while Hong Kong’s Hang Seng rose 0.62%, and Japan’s Nikkei slid 0.10%.
“China’s economy is still in a tailspin, but Beijing claims it will ensure a soft landing,” David Madden, market analyst at IG said in a morning note. “The correction we witnessed today is relatively small when compared with yesterday’s declines, and traders will need to see firm action from the Chinese government before they become serious about going long.”
Meanwhile, focus at home shifted back to earnings season and the start of the Federal Reserve’s two-day policy-setting meeting.
The Federal Open Market Committee’s meeting kicks off Tuesday with a policy announcement due Wednesday afternoon. Investors hope to have more clarity about the timing and trajectory of looming interest rate hikes after this week, though there’s virtually no expectation of a policy change this time around. Consensus still pins the first increase on the FOMC’s September meeting.
Barclays U.S. economists Michael Gapen and Rob Martin noted that before hinting at a firmer rate-hike timeline, members of the FOMC will likely want to see first reading on second-quarter GDP, June producer and consumer price inflation reports, and the July jobs report.
“The FOMC is unlikely to provide a clear signal about the likelihood of a September lift-off at the time of the July meeting. In our view, it will provide a signal only if it has no intention of moving in September. No news leaves the door wide open for September,” they noted.
On the earnings front, Pfizer (NYSE:PFE) said a strong U.S. dollar sent its quarterly revenue down 7%, but the pharmaceutical company boosted its full-year outlook. Merck (NYSE:MRK) also said the dollar’s strength, coupled with the sale of the company’s consumer care business, affected its quarterly performance.
Meanwhile, Ford’s (NYSE:F) North American sales helped the automaker speed past estimates, while the company also maintained its full-year outlook. UPS (NYSE:UPS) also cited the stronger dollar for its weaker-than-expected second-quarter revenue results, adding that a lower fuel surcharge helped drag sales lower.
After the closing bell, traders await earnings from social-media giant Twitter (NYSE:TWTR). Analysts are hoping for a four-cent profit.
The economic data calendar was set with S&P/Case-Shiller home price index, which showed home prices in 20 major metropolitan areas rose 1.1% in May on a non-seasonally adjusted basis. The reading missed expectations for a 1.3% increase. From the same period a year ago, home prices rose 4.9%, also missing expectations for a 5.6% climb.
The Conference Board’s gauge of consumer confidence dropped to 90.9 in July from an earlier reading of 99.8. Wall Street expected the closely-watched gauge to rise to 100 during the month.
In currencies, the euro traded 0.32% lower against the U.S. dollar. The yield on the benchmark 10-year U.S. Treasury note rose 0.027 of a percentage point to 2.255%. Bond yields move in the opposite direction of prices.
Gold, meanwhile, erased gains from Monday, and slid 0.15% to $1,095 a troy ounce.
Elsewhere in the world, European equities closed higher. The Euro Stoxx 50, which tracks large-cap companies in the eurozone, jumped 1.03%. The German Dax climbed 0.93% higher,the French CAC 40 was 0.80% higher, while the UK’s FTSE 100 rose 0.78%.