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Midday Update: Stocks Reverse Course as Oil Stocks Offer Buying Opportunity, Ruble Recovers


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U.S. stocks have reversed their early declines as crude oil futures began to pare overnight losses and investors increasingly appear to be expecting the Federal Open Market Committee to remain cautious before raising interest rates in light of recent global economic shocks. The Dow Jones Industrial Average was nearly 1% higher at mid-day while the S&P 500 has climbed back over 2,000 today. European and U.S. markets had slumped this morning in response to a feeding frenzy for the ruble as the Russian currency fell to a historic low as well as continued pressure on oil prices .

Tuesday's bearish economic data was largely ignored as the global equity markets were gripped by dramatic efforts by the Russian central bank to stifle the freefall for the ruble, including boosting short-term interest rates by 650 basis points to 17% in addition to massive intervention efforts. Housing starts fell 1.6% in November to a seasonally-adjusted annual rate of 1.028 million, missing expectations looking for a 3% gain to around 1.03 million homes. Permits also missed estimates, falling more than 5% to an annualized 1.035 million permits pulled versus the 1.06 million consensus. But one bright spot saw October figures revised upward: sales were raised to 1.045 million homes from the 1.009 million originally reported and permits climbing to 1.092 million from 1.08 million.

In addition to the housing data, manufacturing data was also a disappointment. The Purchasing Manager's flash index for December dropped to a 53.7 reading from November's 54.8 score, trailing the consensus estimate looking for an improvement to 55.5.

European stocks rebounded at the close after the Russian central bank threw the ruble one last lifeline, saying it won't implement capital controls, sending the currency skyrocketing from nearly 80.0 versus the dollar to 63.0 before London's forex close. Most European bourses rallied more than 2%, taking their lead from the impressive rebound on Wall Street as well as mostly upbeat Euro-zone manufacturing data and economic conditions indicators.

Crude oil was up $0.04 to $55.95 per barrel. Natural gas was down $0.05 to $3.65 per 1 million BTU. Gold was down $10.30 to $1,197.20 an ounce, while silver was down $0.77 to $15.80 an ounce. Copper was down $0.01 to $2.87 per pound.

Among energy ETFs, the United States Oil Fund was up 0.71% to $21.21 with the United States Natural Gas Fund was down 1.45% to $18.74. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 0.43% to 17.55 while SPDR Gold Shares were up 0.50% to $114.96. The iShares Silver Trust was down 2.17% to $15.14.

Here's where U.S. stocks stand at mid-day:

NYSE Composite Index up 126.44 (+1.21%) to 10,537.61

Dow Jones Industrial Average up 148.86 (+0.87%) to 17,329.70

S&P 500 up 15.08 (+0.76%) to 2,004.71

Nasdaq Composite Index up 15.59 (+0.34%) to 4,620.74

GLOBAL SENTIMENT

Nikkei 225 Index down 2.01%

Hang Seng Index down 1.55%

Shanghai China Composite Index up 2.31%

FTSE 100 Index up 2.41%

CAC 40 up 2.19%

DAX up 2.46%

NYSE SECTOR INDICES

NYSE Energy Sector Index up 3.40%

NYSE Financial Sector Index up 0.89%

NYSE Healthcare Sector Index up 0.79%

UPSIDE MOVERS:

(+) TLM (+48.05%) Sold to Spain's Reposal for $13 billion.

(+) OAS (+15.55%) Board member McShane buys 50,000 shares.

(+) NVGN (+193.57%) TRXE-009 is shown to be highly active against melanoma.

DOWNSIDE MOVERS:

(-) FRO (-18.47%) Announces private deal to exchange $22.5 mln in bonds for nearly 4 mln shares plus $9.6 mln in cash.

(-) CYCC (-73.50%) A trial studying an acute myeloid leukemia treatment is unlikely to reach a statistically significant improvement in survival.

(-) NAV (-11.67%) Reports narrower fiscal Q4 loss.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.



This article appears in: Investing , Commodities



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