Stocks try to rebound after pullback
Stocks are trying to rebound from a modest pullback today,
fueled by a rally in Japan.
S&P 500 futures are up 0.25 percent and have been climbing for the last four hours. Europe is also fighting back from earlier losses, led by high-beta countries such as Italy and Spain. Most of Asia was down fractionally in the overnight session, but Tokyo rallied almost 2 percent after the Bank of Japan said it will continue buying assets in a bid to drive economic growth. The yen is crumbling as well, which tends to support equity markets.
The S&P 500 has declined for three straight sessions--its longest consecutive slide since late September--after touching an all-time high above 1800 at the beginning of the week. It's been rallying all year as capital comes off the sidelines, egged on by an improving economy and easy monetary conditions.
Price action has been somewhat cautious in the last week, with small caps, transports and consumer-discretionary stocks lagging, but our researchLAB analysis tool shows new strength is appearing among financials and energy. Both of those sectors had lagged in the longer term.
Yesterday's decline resulted partly from news that the Federal Reserve might slow the pace of bond purchases, which drove bond yields higher. But investors may be more willing to get long now that the central bank's statement is in the rear-view mirror. The calendar remains relatively quiet through Thanksgiving late next week.
Retail has struggled recently amid a series of poor quarterly reports. That trend continues today, with Target, Dollar Tree, Abercrombie & Fitch, and L Brands all trading lower after releasing results. Green Mountain Coffee Roasters is climbing after profit and sales beat forecasts.
In other news, Chinese manufacturing and European private-sector business both slowed more than expected this month, according to purchasing managers indexes.
The weak yen is the main story in foreign-exchange markets, though the euro is also edging higher. Commodities are bullish as well, with oil and copper both posting small gains. One big question facing investors now is whether West Texas crude may bounce after pulling back to levels last seen in June. If it does, that could support domestic energy stocks.
Precious metals are weak and increasingly look at risk of breaking long-term support. Agricultural products are mixed.