Global shares gain as global economy fears ease, oil rallies

NEW YORK (Reuters) – U.S. and European shares rebounded from recent weakness on Friday, with reassuring U.S. retail sales data boosting sentiment, while U.S. crude prices rallied from more than 12-year lows.

Banking shares in the United States and Europe spiked, with the S&P financial index last up 3.4 percent and the STOXX 600 Europe Banks index gaining 5.6 percent.

The U.S. S&P 500 gained over 1 percent after five days of losses that had dropped it to its lowest level in two years on Thursday. In Europe, advances in shares of Deutsche Bank and its rival Commerzbank of 11.8 percent and 18 percent, respectively, helped European stocks rebound.

The FTSEurofirst 300 index of top European shares notched its biggest daily gain in five and a half months after hitting a two-and-a-half-year low on Thursday. The index was up 3.04 percent at 1,232.09.

The S&P financial index has fallen about 15 percent this year, and the European bank index nearly 25 percent, as worries over the impact of central banks’ negative interest rate policies on banks’ profitability intensified in recent days.

Commerce Department data showing U.S. retail sales excluding automobiles, gasoline, building materials and food services increased 0.6 percent in January also boosted optimism.

‘OVERWHELMING’ CHANCE OF RECESSION

“The market has gone from very little chance of recession to pricing in an overwhelming chance of recession despite the data not supporting that,” said Michael Jones, chief investment officer of RiverFront Investment Group in Richmond, Virginia.

“The more numbers you get like retail sales … the more this market can whipsaw people by heading right back up.”

An overnight drop in Asia shares limited gains in MSCI’s all-country world equity index. The index rose 2.61 points, or 0.74 percent, to 355.96.

On Thursday, it had closed more than 20 percent below its all-time high, confirming a bear market in global equity prices. Mainland China markets reopen on Monday after the Lunar New Year holiday.

On Wall Street, the Dow Jones industrial average was last up 226.72 points, or 1.45 percent, at 15,886.90. The S&P 500 was up 25.1 points, or 1.37 percent, at 1,854.18. The Nasdaq Composite was up 43.12 points, or 1.01 percent, at 4,309.96.

The S&P energy index was last up 1.7 percent. U.S. crude oil jumped as much as 13 percent on prospects for a coordinated production cut sparked by comments from the energy minister of OPEC member United Arab Emirates.

U.S. crude was last up 12 percent at $29.38 per barrel after hitting $26.05 a barrel on Thursday, the lowest in more than 12 years. Brent crude was last up nearly 10 percent at $33.03 a barrel.

Safe-haven 10-year Treasury notes were last down 30/32 in price to yield 1.75 percent after hitting 1.53 percent Thursday, their lowest yield since Aug. 2012.

The dollar rose after the U.S. retail sales data. The dollar index, which measures the greenback against a basket of six rivals, was last up 0.5 percent.

Spot gold was down $8.75 to $1,237.76 an ounce but was still set for its best week in four years.

(Additional reporting by Dion Rabouin and Tariro Mzezewa in New York, Libby George in London and Aastha Agnihotri in Bengaluru; Editing by Nick Zieminski and Bernadette Baum)

Global shares plunge on worldwide growth, bank fears

NEW YORK (Reuters) – Stock indexes worldwide fell on Thursday on fears over the health of the global economy and banking sector, with MSCI’s world stock index dropping to more than 20 percent below its all-time high, while safe-haven 10-year Treasury yields hit their lowest since 2012.

Concern over sluggish global growth and doubts over central banks’ ability to support the global economy pushed the U.S. benchmark S&P 500 index down 10.5 percent for the year. The FTSEurofirst 300 index of top European shares sank to its lowest level in 2-1/2 years.

The dollar hit its lowest against the safe-haven yen since October 2014, at 110.985 yen, and was on track for its worst week against the Japanese currency since 2008.

“There are mounting concerns about the ability of central banks to continue to prop up asset prices,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. “That’s part of why we’re seeing assets across the board come under pressure.”

Banks in Europe ended 6.3 percent lower, making them the worst-performing sector and widening their losses for the year to more than 28 percent. Shares of Societe Generale, France’s second-biggest bank, closed down 12.6 percent after disappointing results.

Worries also hit shares of U.S. banks, with the S&P financial index ending down about 3 percent. Concerns over profitability in a low-growth, low-interest rate environment have knocked confidence in the banking sector this week, particularly in Europe.

YELLEN

The declines came even as Federal Reserve Chair Janet Yellen sought to reassure investors in congressional testimony that the Fed will remain flexible in its approach. The markets, however, do not expect the Fed to raise rates further this year, compared with Fed forecasts that still point to more tightening.

“Credit has been signaling these concerns, and to some extent other markets, and particularly equity, have caught up with what credit had been telling them, which was: We’re really worried about global growth, we’re really worried that central banks are running out of ammunition,” said David Riley, head of credit strategy at BlueBay Asset Management in London.

Yields on benchmark 10-year U.S. Treasury notes hit 1.53 percent, their lowest level since August 2012, on the worries over global growth and the effectiveness of central bank policy.

MSCI’s all-country world equity index, which tracks shares in 45 nations, was last down 4.73 points, or 1.32 percent, at 353.35. The index hit its lowest level in more than 2-1/2 years and was last down more than 20 percent from an all-time high.

The Dow Jones industrial average ended down 254.56 points, or 1.6 percent, at 15,660.18. The S&P 500 lost 22.78 points, or 1.23 percent, at 1,829.08. The Nasdaq Composite dropped down 16.76 points, or 0.39 percent, to 4,266.84.

Europe’s broad FTSEurofirst 300 index closed down 3.68 percent at 1,195.76.

U.S. crude fell, hitting a 12-year low of $26.05 a barrel as domestic stocks grew and Goldman Sachs called for depressed prices until the second half of the year.

U.S. crude hit a more than 12-year low of $26.05 a barrel before settling down $1.24, or 4.52 percent, at $26.21 a barrel. Brent crude settled down 78 cents, or 2.53 percent, at $30.06 a barrel.

Safe-haven spot gold surged 5.3 percent to $1,260.60, the highest in a year. U.S. gold futures for April delivery settled up 4.5 percent at $1,247.80 per ounce.

(Additional reporting by Clara Denina, Simon Falush Kit Rees and Alistair Smout in London, Dion Rabouin, Tariro Mzezewa in New York, and Abhiram Nandakumar in Bengaluru; Editing by Bernadette Baum and Dan Grebler)

What’s behind the global stock market selloff?

NEW YORK (Reuters) – Global stock markets are on their shakiest footing in years.

Investors are fleeing stocks and running to safe-havens like bonds and gold, driven by concerns about economic growth the effectiveness of central banks’ policies.

At the same time, tumbling energy prices are upending the economies of oil-producing countries, further slicing into global economic growth.

Only six weeks ago cheap oil prices were still expected to cushion the global economy, and the Federal Reserve’s decision in December to raise interest rates for the first time since the end of the financial crisis in 2008 was widely seen as a vote of confidence in the world’s largest economy.

In addition to the fall in U.S. stock markets, major stock indexes worldwide have also been hit hard, despite efforts by the Bank of Japan and the European Central Bank to spur growth through lower interest rates.

Large institutions and sovereign wealth funds, who borrowed in euro and yen, have been selling riskier assets, and are now buying back those currencies, undermining central bank efforts.

With Thursday’s decline, the S&P 500 stock index has lost 10.5 percent so far in 2016, its worst start to a year in history, according to Bespoke Investment Group, an investment advisory in Harrison, New York. The 10-year note’s yield has fallen to 1.63 percent, its lowest closing level since May 2013.

Here are some of the chief issues weighing on the market now.

WHAT IS THE BIGGEST REASON FOR THE SELLOFF?

The slump in equity prices which began late last year has deepened as banks grapple with negative interest rates in parts of Europe and Japan and the flattening of the U.S. Treasury yield curve.

“One of the new themes in markets is that (quantitative easing) has damaged the banks and that therefore it exacerbates the risk-off environment,” said Steve Englander, managing director and global head of G10 FX strategy at Citigroup in New York.

Negative interest rates on central bank deposits and on government bond yields undermine the traditional ability of banks to profit from the difference between borrowing costs and lending returns.

With a decline of 18 percent on the year, S&P 500 financials are by far the worst performing sector in 2016.

While the Federal Reserve has avoided introducing negative rates on reserves, in Congressional testimony on Thursday, Fed Chair Janet Yellen told lawmakers that the Fed would look into negative interest rates if needed.

“I wouldn’t take those off the table,” she said.

WASN’T ENERGY THE PROBLEM?

Higher levels of U.S. oil output, thanks to fracking technology, along with over-production by Saudi Arabia, contributed to a world-wide oil glut, sparking a steep fall in energy and other commodity prices at the start of last year.

At $27 a barrel, oil prices are now near 13-year lows and some analysts say they expect to see prices drop further.

Tumbling oil prices resulted in sharp contractions in the economies of oil-producing countries, and pushed up yields on corporate debt, leading to defaults in the energy sector.

“Investors whose livelihood revolve around oil and gas and commodities are liquidating because they need the cash,” said Stephen Massocca, chief investment officer at Wedbush Equity Management in San Francisco.

WHAT’S NEXT FOR THE FED?

Markets now do not expect the Fed to go ahead with its planned interest rate rises this year. The federal funds futures market now shows traders are not expecting the Fed to raise rates until at least February of next year. At one point on Thursday, futures contracts were even pricing in a slight chance of a rate cut this year, and investors said some of the rally in gold prices resulted from the possibility of a rate cut.

The move in fed funds futures has been accompanied by a rapid decline in the spread between short-dated and long-dated U.S. Treasury securities. The difference between the 2-year Treasury note yield and 10-year note yield has narrowed to 0.95 percentage points, the tightest it has been since December 2007. The flattening of the yield curve has often preceded recessions in the past.

The narrowing yield curve spread shows investors are less confident of economic growth, even though Yellen told Congress on Wednesday that U.S. economy looks strong enough that Fed may stick to its plan to gradually raise interest rates.

“Part of the problem is that the Fed is in a no-man’s land right now: not dovish enough for the doves and not hawkish enough for the hawks, so it’s not satisfying any point of view in the investment markets,” said Terri Spath, chief investment officer at Santa Monica-based Sierra Investment Management.

WHEN WILL THE FALL IN STOCKS END?

There are few signs yet that investors are dumping their holdings wholesale, typically a mark of a market bottom, said Alan Gayle, director of asset allocation at RidgeWorth Investments in Atlanta.

“It still seems to be focused on specific issues, whether it’s credit or it’s oil. But clearly there is a more defensive tone that the market is taking and we’re watching for signs of capitulation,” he said.

Similarly, Credit Suisse noted that hedge funds have been selling in February, but the scope of that selling “lacks the much anticipated capitulation trade that would signal a bottom.”

Credit Suisse also noted that macro-focused hedge funds have built up large U.S. equity short positions which have been a decent indicator of market direction in the past.

Even if the severity of the selling tapers off, 2016 will likely continue to be a bad year for stocks, said Mohannad Aama, managing director at Beam Capital Management in New York. The S&P 500 stock index is down approximately 10.3 percent for the year to date, while the Nasdaq Composite is down more than 15 percent over the same time.

“Although we’ve being seeing good job numbers, the general feeling is that the U.S. economy is nearing a peak and there is not much left as far as trends to be talked about,” Aama said.

(Reporting by Lewis Krauskopf, Ann Saphir, Howard Marcus, Saqib Ahmed, Jennifer Ablan, Chuck Mikolajzcak and David Randall. Writing by David Randall and David Gaffen.)

S&P 500 erases gains on global growth fears, Europe stocks rise

NEW YORK (Reuters) – Most U.S. shares ended little changed to lower on Wednesday, erasing early gains on concerns about global growth and sliding commodity-related shares, while greater calm surrounding the European banking sector boosted that region’s shares.

The benchmark U.S. S&P 500 stock index rose as much as 1.6 percent following Federal Reserve Chair Janet Yellen’s prepared testimony to Congress. It changed course and ended mostly flat, while the Dow Jones industrial average ended down 100 points.

Yellen acknowledged that tightening financial conditions and uncertainty about China posed risks, but told Congress she does not expect the central bank to reverse its rate hike program.

As upbeat sentiment faded and U.S. oil prices fell, materials and energy shares were Wall Street’s biggest losers. Stock markets have sagged given uncertainty surrounding monetary policy and a steep decline in commodity prices.

European shares snapped a seven-day losing streak, bolstered by solid earnings and a recovery in Deutsche Bank from 30-year lows. The euro zone’s banking index ended up 6.9 percent. It still appeared headed for a seventh straight weekly decline, the longest losing streak since 1998.

“Nervous investors have been selling strength in the market,” said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta, citing persistent worries about global growth.

MSCI’s all-country world equity index, which tracks shares in 45 nations, was last down 0.35 points or 0.1 percent, at 358.08.

The Dow Jones industrial average ended down 99.64 points, or 0.62 percent, at 15,914.74. The S&P 500 closed down 0.35 points, or 0.02 percent, at 1,851.86. The Nasdaq Composite rose 14.83 points, or 0.35 percent, to 4,283.59.

Europe’s broad FTSEurofirst 300 index ended up 1.78 percent, at 1,241.49. On Tuesday, the index fell 1.6 percent and hit its lowest since September 2013.

Brent crude prices settled up 52 cents, or 1.72 percent, at $30.84 a barrel. U.S. crude settled down 49 cents, or 1.75 percent, at $27.45 a barrel.

The dollar hit 113.100 yen, its lowest since Nov. 2014, as investors packed into the safe-haven Japanese currency despite Yellen’s comments.

The “dovish undertones” of Yellen’s testimony reinforced the view “that the Fed is probably not going to go through with a rate increase next month,” said Kathy Lien, managing director of BK Asset Management in New York.

Treasury yields dipped after the U.S. Treasury sold $23 billion in 10-year notes to solid demand, showing investors have been unfazed by this year’s drop in yields.

Benchmark 10-year U.S. Treasury yields hit a one-year low of 1.673 percent.

U.S. gold futures for April delivery settled down 0.3 percent at $1,194.60 an ounce.

(Additional reporting by Dion Rabouin and Karen Brettell in New York and Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski and David Gregorio)

Wall Street inches lower, Europe shares sink on growth fears

NEW YORK (Reuters) – U.S. stocks recovered from early losses to end slightly lower on Tuesday while European shares plunged for a second straight day on fears of slowing global growth, with particular concern over the health of the banking sector.

The benchmark U.S. S&P 500 erased most losses after falling as much as 1 percent, with gains in health care and materials shares offsetting declines in energy stocks. Shares of U.S. banks stumbled before paring losses, with the S&P financial index ending just 0.16 percent lower.

The S&P energy index closed down 2.47 percent and stood out as the day’s weakest sector after Brent crude settled 7.8 percent lower on the day. The volatile session came after all three major U.S. indexes lost more than 1 percent on Monday.

The European banking index ended 4 percent lower after sinking 5.6 percent on Monday on fears of worsening bank profitability and capital strength from sustained low interest rates.

“There may be some hope there that (Federal Reserve Chair Janet Yellen) is going to say something to buoy the markets,” said Peter Jankovskis, co-­chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

Yellen will address Congress on Wednesday.

MSCI’s all-country world equity index, which tracks shares in 45 nations, was last down 2.38 points or 0.66 percent, at 358.43.

The Dow Jones industrial average ended down 12.67 points, or 0.08 percent, at 16,014.38. The S&P 500 closed down 1.23 points, or 0.07 percent, at 1,852.21. The Nasdaq Composite ended down 14.99 points, or 0.35 percent, at 4,268.76.

The FTSEurofirst 300 index ended down 1.6 percent at 1,219.82. The index hit its lowest level since September 2013 earlier in the day.

Benchmark Brent crude prices fell to their lowest in two weeks and U.S. crude prices dropped below $28 a barrel to their lowest in just under three weeks. Forecasts for more growth in U.S. crude stockpiles and weak demand forecasts contributed to the plunge.

Brent crude settled down $2.56, or 7.8 percent, at $30.32 a barrel. U.S. crude settled down $1.75, or 5.9 percent, at $27.94 a barrel.

Yields on benchmark 10-year Treasury notes, sought for their relative safety, extended Monday’s declines to hit 1.682 percent, the lowest in a year.

“The mood in the market is very much ‘sell today, ask questions later’ which is a boost for Treasuries and that flight to safety is led by fear,” said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

Spot gold, another safe-haven asset, rose in price to just below the 7 1/2-month high struck the previous day.

The U.S. dollar extended Monday’s drop against the safe-haven Japanese yen, hitting its lowest against the yen since November 2014 of 114.205 yen. The Mexican peso hit an all-time low against the dollar.

U.S. gold for April delivery settled up 70 cents at $1,198.60 an ounce.

(Additional reporting by Dion Rabouin, Tariro Mzezewa and Caroline Valetkevitch in New York and Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski and Dan Grebler)

Growth worries, rate hike uncertainty pull Wall Street down

(Reuters) – U.S. stocks dropped on Monday as concern over global growth hit banks and other economically sensitive shares, although a late rally in energy shares left the market well above its lows of the day.

European banks led a global selloff in financial stocks as signs of stress in the sector mounted.

Uncertainty over whether the Federal Reserve would raise rates this year also dragged down U.S. bank stocks, pushing the S&P financial index down 2.6 percent.

The index is off 14.6 percent for the year, the worst-performing of the 10 major S&P sectors. It is down more than 20 percent from its July 2015 high, confirming the sector is in the grip of a bear market.

“Investors’ attitudes seem to be worsening relative to the likelihood of a global recession. I think that’s what financials are reflecting – that their net interest margins are going to be further compressed under collapsing bond yields,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The yield on the 10-year Treasury note fell to a one-year low.

Shares of Morgan Stanley slid 6.9 percent in their largest one-day drop since November 2012, while rival Goldman Sachs fell 4.6 percent. Both closed at their lowest since 2013.

Facebook Inc, Amazon.com Inc and other technology stocks that had lent strength to the market last year extended their decline from Friday. Fund managers said last year’s outsized gains among some Internet stocks made them the first choice to sell now.

Sharp selling in the beaten-down energy sector reversed late in the session, leaving the S&P energy index  up 0.1 percent and S&P 500 well off its lows of the day.

But Chesapeake Energy ended down 33.3 percent at $2.04 after sources told Reuters that the natural gas company had tapped existing adviser Kirkland & Ellis to explore restructuring options. Chesapeake said it has no plans to pursue a bankruptcy.

The Dow Jones industrial average closed down 177.92 points, or 1.1 percent, at 16,027.05, the S&P 500 lost 26.61 points, or 1.42 percent, to end at 1,853.44 and the Nasdaq Composite dropped 79.39 points, or 1.82 percent, to 4,283.75.

Falling oil prices along with concern over a worsening global growth outlook have caused a sharp selloff in stocks this year. Investors have been searching for a catalyst that might change the market’s course.

“I don’t know if we’ve seen any tangible evidence of a turn in any macro economic conditions that would warrant a firm bottoming,” Luschini said, noting the selloff in financials.

Adding to recent woes for the tech sector, Cognizant dropped 7.7 percent to $54.05 after the IT services provider issued a weak sales forecast.

Amazon fell 2.8 percent while Facebook dropped 4.2 percent.

Volume was heavy. About 10.6 billion shares changed hands on U.S. exchanges, above the 9.4 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by 2,484 to 618; on the Nasdaq, 2,029 issues fell and 804 advanced. The S&P 500 posted 7 new 52-week highs and 97 new lows; the Nasdaq recorded 4 new highs and 495 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru and Marcus E. Howard in New York; Editing by Savio D’Souza, Nick Zieminski and Bill Rigby)

Nasdaq ends week at lowest level since October 2014

(Reuters) – The Nasdaq closed at its lowest since October 2014 on Friday, leading a selloff on Wall Street following weak forecasts from technology companies including LinkedIn.

LinkedIn dropped 43.6 percent to $108.38, a day after the company’s revenue forecast missed estimates.

Business analytics company Tableau Software lost half its market value and its shares hit an all-time low a day after it cut its full-year earnings forecast. Its shares ended down 49.4 percent at $41.33.

Big tech names also sank, including Facebook, which dropped 5.8 percent to $104.07. Alphabet fell 3.6 percent to $703.76 and Amazon slid 6.4 percent to $502.13. Netflix was down 7.7 percent at $82.79.

Stocks like Amazon and Netflix, which both more than doubled in price last year, have been favorites with hedge funds. Friday’s action may suggest some hedge funds may be taking a harder look at valuations.

“Tech has got a few shining examples of what happens if you disappoint,” said Art Hogan, chief market strategist at Wunderlich Securities in New York. “When that happens, that calls into question the valuations of all high-multiple stocks.”

The Dow Jones industrial average closed down 211.75 points, or 1.29 percent, to 16,204.83, the S&P 500 lost 35.43 points, or 1.85 percent, to 1,880.02 and the Nasdaq Composite dropped 146.42 points, or 3.25 percent, to 4,363.14.

Friday’s January jobs report non-farm payrolls increased by 151,000 jobs, below the 190,000 expected by economists polled by Reuters as the boost to hiring from unseasonably mild weather faded. But strong wage growth and falling unemployment suggested a March interest rate increase could not be completely ruled out.

Declining issues outnumbered advancing ones on the NYSE by 2,330 to 720, for a 3.24-to-1 ratio on the downside; on the Nasdaq, 2,288 issues fell and 509 advanced for a 4.50-to-1 ratio favoring decliners.

The S&P 500 posted 7 new 52-week highs and 26 new lows; the Nasdaq recorded 3 new highs and 195 new lows.

(Additional reporting by Saqib Ahmed in New York; Editing by Nick Zieminski and Dan Grebler)

U.S. stocks rise for second day; materials a boost

(Reuters) – A jump in materials shares helped U.S. stocks eke out a second straight day of gains on Thursday, though disappointing forecasts from retailers and anxiety ahead of Friday’s jobs report limited the advance.

The S&P 500 materials index rose 2.8 percent, leading the day’s gains, as declines in the U.S. dollar lifted copper and other metals prices.

The dollar index fell for a fourth day on the latest batch of soft U.S. data, which dampened expectations for U.S. interest rate hikes this year. A weaker dollar benefits big U.S. companies that depend on overseas sales.

Data showed non-farm productivity fell in the fourth quarter at its fastest pace in more than a year, while new orders for U.S. factory goods also fell in December by the most in a year.

The weaker data came ahead of Friday’s key monthly jobs report from the U.S. government, which is expected to show 190,000 non-farm jobs added in January.

Adam Sarhan, chief executive of Sarhan Capital in New York, said the market is trying to bounce from “deeply oversold” levels, but is struggling because of continued weakness in earnings and economic data.

“We’re now seeing a lot of weaker-than-expected economic data coming out,” he said. “The bullish catalyst just isn’t there to justify further rate hikes.”

The Dow Jones industrial average rose 79.92 points, or 0.49 percent, to end at 16,416.58, the S&P 500 gained 2.92 points, or 0.15 percent, to 1,915.45 and the Nasdaq Composite added 5.32 points, or 0.12 percent, to 4,509.56.

Consumer-related shares were among the day’s biggest losers in the S&P 500 after retailers Ralph Lauren and Kohl’s warned of a tough year ahead. Ralph Lauren sank 22.2 percent to $89.95 while Kohl’s fell 18.8 percent to $41.52, the two biggest percentage decliners in the S&P 500.

The consumer discretionary index was down 0.6 percent, while S&P staples was down 0.9 percent.

Stocks have had a rough start to 2016, hurt by tepid U.S. growth, falling oil prices and concern that the world faces a China-led slowdown.

UBS cut its year-end target and trimmed its earnings estimate for the S&P 500 on the weaker U.S. growth prospects.

Fourth-quarter S&P 500 earnings are expected to have fallen 4.2 percent from a year earlier, according to Thomson Reuters data.

GoPro fell 8.7 percent to $9.78 after the camera maker forecast current-quarter revenue below analysts’ estimates.

After the bell, shares of LinkedIn dropped 24 percent following the networking site operator’s results and forecast.

About 9.5 billion shares changed hands on U.S. exchanges, compared with the 9.4 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by 1,949 to 1,087, for a 1.79-to-1 ratio on the upside; on the Nasdaq, 1,659 issues rose and 1,123 fell for a 1.48-to-1 ratio favoring advancers.

The S&P 500 posted 11 new 52-week highs and 11 new lows; the Nasdaq recorded 14 new highs and 83 new lows.

(Additional reporting by Tanya Agrawal; Editing by Don Sebastian and Nick Zieminski)

Dow, S&P 500 rally with energy, Alphabet drops

(Reuters) – U.S. stocks staged a late-day rally on Wednesday as an 8-percent jump in oil prices lifted beaten-down energy shares and financials rebounded.

The Nasdaq stayed weaker but ended well off the day’s lows.

Oil prices snapped a two-day rout as investors took advantage of a weaker U.S. dollar. Comments by Russia’s foreign minister reignited hopes of a deal among oil producers to trim output. The energy index jumped 4 percent.

“What (markets) are keying off of is the move in commodities and in the dollar,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina. “That is driving the rotation in the equity market out of momentum names into commodity-based names.”

Alphabet shares tumbled 4 percent to $749.38 and the company moved back below Apple in market capitalization. Apple, the world’s most valuable company, rose 2 percent at $96.35.

Alphabet’s selloff may be a combination of broad-based weakness in tech stocks that are trading at high valuations and the departure of Amit Singhal as senior vice president of the company’s search business, said Kevin Kelly, chief investment officer for Recon Capital Partners.

“That was a little surprising, especially this close after earnings,” he said, referring to Singhal’s departure.

The Dow Jones industrial average ended up 183.12 points, or 1.13 percent, to 16,336.66, the S&P 500 gained 9.5 points, or 0.5 percent, to 1,912.53 and the Nasdaq Composite dropped 12.71 points, or 0.28 percent, to 4,504.24.

Other high-flying tech names that fell on Wednesday included Amazon, down 3.8 percent at $531.07.

The dollar’s decline may have eased worries about the impact of dollar strength on U.S. multinationals’ earnings. Shares of 3M Co., up 3.1 percent at $152.52, led gains in the Dow.

The S&P materials was up 3.3 percent, the day’s second-best performing sector. The S&P financial index ended down just 0.1 percent after hitting its lowest in more than two years.

Stocks’ late-day rally reversed sharp losses in morning trading. U.S. data showed the economy’s service sector expanded at a slower-than-expected rate, raising concerns that weakness in manufacturing was spreading to other areas of the economy.

In other economic news, ADP data showed private employers added more jobs than expected in January. The data comes ahead of the government’s more comprehensive employment report on Friday.

Tepid U.S. growth, falling oil prices, and fears regarding a China-led global slowdown have combined to drive stocks down sharply since the start of the year.

After the bell, CBS Corp said media mogul Sumner Redstone had resigned as executive chairman. Shares of Viacom Inc, where Redstone is also chairman, shot up 10.6 percent to $49.40. CBS shares also were up.

During the session, about 10.2 billion shares changed hands on U.S. exchanges, above the 9.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered decliners on the NYSE 1,920 to 1,102; on the Nasdaq, 1,393 issues fell and 1,391 advanced. The S&P 500 posted 22 new 52-week highs and 56 new lows; the Nasdaq recorded 16 new highs and 236 new lows.

(Additional reporting by Saqib Ahmed and Lewis Krauskopf in New York; Editing by Richard Chang and James Dalgleish)

Wall Street slides with Exxon, oil

(Reuters) – U.S. stocks dropped on Tuesday after another steep fall in oil prices and a disappointing spending forecast from Exxon Mobil.

Shares of Exxon fell 2.2 percent to $74.59 after the oil major reported its smallest quarterly profit in more than a decade, forecast a 25-percent drop in capital spending from 2015 levels and suspended share repurchases.

With Exxon, “not only did the earnings disappoint people, but the fact that they slashed capex so much and they (suspended) their share repurchase program. It’s a good indication that one more large oil company is not seeing an improvement in the environment,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Data so far this earnings period shows the capital spending slump that originated in the hard-hit energy sector was spreading more widely across other U.S. industries.

Earlier Tuesday, BP Plc reported an annual loss of $6.5 billion, its largest ever.

The S&P energy index slid 3.3 percent, the biggest drag on the S&P 500. Oil prices slid sharply as hopes faded for a deal between OPEC and Russia to cut output. The S&P utility index rose 0.4 percent, the only sector to end in positive territory.

The Dow Jones industrial average closed down 295.64 points, or 1.8 percent, to 16,153.54, the S&P 500 lost 36.35 points, or 1.87 percent, to 1,903.03 and the Nasdaq Composite dropped 103.42 points, or 2.24 percent, to 4,516.95.

The Dow Jones transportation average ended 2.9 percent lower following news of the first U.S. transmission of the Zika virus.

The S&P 500 is down 6.9 percent since the start of the year. Investors have been concerned about a China-led global economic slowdown, tepid U.S. economic data, the pace of interest rate hikes by the Federal Reserve and weak earnings. Fourth-quarter S&P 500 earnings are expected to have fallen 4.4 percent from a year earlier, according to Thomson Reuters data.

Bucking the day’s trend, Alphabet was up 1.3 percent at $780.91. Quarterly profit beat estimates late Monday and the Internet major surpassed Apple as the most valuable U.S. company.

After the bell, shares of Chipotle fell 3 percent after it reported its first fall in quarterly sales at established restaurants since it went public. The stock ended the regular session up 0.6 percent at $475.67.

Also, Yahoo dipped 1 percent in extended trading following its results.

Investors are keeping an eye on the U.S. election cycle. Iowa results created greater uncertainty because there were no clear winners, said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

“The bottom line for people who are investing is they prefer a little more certainty than they are seeing right now in either the election or in the energy markets,” he said.

About 8.5 billion shares changed hands on U.S. exchanges, below the 9.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.

NYSE declining issues outnumbered advancers 2,478 to 603 and on the Nasdaq, 2,237 issues fell and 577 advanced. The S&P 500 posted 15 new 52-week highs and 28 lows; the Nasdaq recorded 22 new highs and 143 lows.

(Additional reporting by Tanya Agrawal and Lewis Krauskopf; Editing by Nick Zieminski and James Dalgleish)