Thursday, September 10, 2015 09:45 AM | Source: CNBC
Stocks rose Thursday as recovery in oil and major stocks offset increased uncertainty heading into the Federal Reserve's key meeting next week.
The Dow Jones industrial average traded about 20 points higher after earlier gaining more than 100 points in mid-morning trade with Apple and UnitedHealth (UNH) the greatest drivers. Biotechs and Apple advanced to briefly boost the Nasdaq 1 percent.
Apple (AAPL) briefly traded more than 2 percent higher, recovering losses from Wednesday when it unveiled new iPhones, the iPad Pro and other products.
"You have a rally in metals, a rally in oil, and here we are at the highs of the day," Peter Cardillo, chief market economist at Rockwell Global Capital, said of the mid-morning rally.
Crude oil reversed a 3.9 percent decline to briefly gain more than 3 percent to above $45.50 a barrel. Crude held higher after weekly inventory numbers showed a build of 2.6 million barrels, more than expected.
Natural gas inventories rose 68 billion cubic feet. Metals, including copper and gold, also gained more than half a percent.
The major averages shook off a mildly lower open to fluctuate between slight gains and losses. Futures reversed gains in premarket trade to turn lower, with the Dow futures briefly falling more than 100 points.
Some analysts attributed the decline in futures to hedge fund giant David Tepper's comments on CNBC's "Squawk Box" that held a cautious view of the stock market.
"He did not give a bullish tone to the market. He mentioned he's mostly cash," said John Caruso, senior market strategist at RJO Futures.
In early trade, the S&P 500 was about 4.2 percent above the closing low of the correction hit on Aug. 25. The Dow was also 4 percent above that level, while the Nasdaq was 5.8 percent above that level.
Of the S&P sectors, only utilities was trading below their Aug. 25 close.
"The market's got to do more work down at these levels. You've done a lot of technical damage to the market. ... I also think there's a little bit of confidence rebuilding that needs to occur because of what happened two weeks ago, which was a mini-flash crash," said Dan Veru, chief investment officer at Palisade Capital Management.
The Federal Open Market Committee could raise short-term interest rates for the first time in more than nine years at its meeting next Wednesday and Thursday.
"I think there's a little flight to safety," said Art Hogan, chief market strategist at Wunderlich Securities. "People are a little nervous about next week even though it's not today."
On the data front, initial jobless claims fell 6,000 to a seasonally adjusted 275,000 for the week ended Sept. 5, the Labor Department said on Thursday. It was the 27th straight week that claims remained below the 300,000 threshold, which is usually associated with a strengthening labor market.
U.S. import and export prices posted their largest drop in seven months.
Longer-term Treasury yields gained while the shorter-end held lower, with the 2-year yield at 0.73 percent and the 10-year yield at 2.21 percent.
The U.S. dollar traded flat against major world currencies, with the euro topping $1.12 and the yen near 121 yen against the greenback.
"The markets are starting to coil. The range of the (FX) market trends tend to get tighter as traders and investors (grow) uncertain ahead of next week's Fed meeting Wednesday," Caruso said.
Wholesale stockpiles declined 0.1 percent in July, missing expectations for a slight gain. Sales decreased 0.3 percent.
On the earnings front, Lululemon Athletica (LULU) beat estimates by one cent with quarterly profit of 34 cents per share, with revenue and a same store sales increase of six percent also exceeding forecasts.
Finisar (FNSR) and Zumiez (ZUMZ) are due to report after the bell.
In Europe, the pan-European STOXX 600 index was about 1 percent lower after weak data from Japan and China. Core machinery orders in Japan fell by 3.6 percent in July, while in China, the producer price index fell by 5.9 percent. Key major Asian stocks closed lower.
The Dow Jones industrial average (.DJI) traded up 87 points, or 0.53 percent, at 16,340, with Apple leading advancers and Wal-Mart (WMT) the greatest decliner.
The S&P 500 (.SPX) traded up 11 points, or 0.55 percent, at 1,952, with information technology leading eight sectors higher and energy and telecommunications the only decliners.
The Nasdaq (.IXIC) traded up 42 points, or 0.88 percent, at 4,798.
The CBOE Volatility Index (.VIX)(.VIX), widely considered the best gauge of fear in the market, traded near 26.
Nine stocks advanced for every five decliners on the New York Stock Exchange, with an exchange volume of 245 million and a composite volume of 1.0 billion in late morning trade.
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