Markets

Stocks pause after quick bounce

Stocks are giving back some of yesterday's gains as traders await a quiet session before earnings season.

S&P 500 futures are down 0.2 percent, while Europe is fractionally higher. Asia rose 0.5-1 percent overnight following Wall Street's lead, though Chinese markets remain closed for a holiday until tomorrow.

The S&P 500 has climbed for five straight sessions after finding support around the same level where it bounced in late August. The index is now back near the top of its recent range and approaching its 50-day moving average for the first time since breaking down from record highs over the summer.

Economic news has weakened since the drop, with monthly job gains, manufacturing data, and service-sector activity all missing estimates in the last week. That's caused investors to delay expectations for an interest-rate increase by the Federal Reserve. Consumer-related data has fared better.

In company-specific news, PepsiCo rose 2 percent after profit and revenue beat estimates. DuPont is up 6 percent after CEO Ellen Kullman quit in response to pressure from activist investor Nelson Peltz. PMC Sierra surged 33 percent after agreeing to be purchased by Skyworks Solutions. Premium subscribers to our InsideOptions Pro service will make about 1,000 percent from the news.

Illumina, a provider of products to the biotechnology industry, plunged 18 percent after pre-announcing weak quarterly revenue. Container Store also dropped 9 percent after sales and earnings missed.

There are few catalysts in the near term. August trade numbers at 8:30 a.m. ET, which seldom affect sentiment, are the only item this morning, followed by Yum Brands' results this evening. Tomorrow brings mortgage applications and crude-oil inventories, along with earnings from Monsanto.

Price action has been mixed across recently, with no single sector clearly leading. Energy and materials have outperformed in the last two weeks after bouncing at long-term lows. Health care, the single best group over the last several years, has underperformed.

Commodities and currencies are little-changed.

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

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

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