S&P 500 Musters First Gain Of 2015, Snaps 5-Day Losing Streak

U.S. stocks rebounded on Wednesday, highlighted by the S&P 500 recording its first gain in 2015 and snapping a five-day losing streak.

Optimism on Wall Street followed calmer oil and currency markets, which have been behind the brutal selloff in global equities over the previous two sessions that left the Dow industrials with the worst start to a year since 2008.

Market reaction to the closely watched minutes of the December meeting of the Federal Reserve was neutral. Minutes indicated that low inflation would not prevent the central bank from raising rates, but not until at least April.

The S&P 500 SPX, +1.16% closed 23.29 points or 1.2%, higher at 2,025.90, with nine of 10 main sectors recording gains. Health care and consumer staples sector stocks led the gains, while telecoms lagged. The Dow Jones Industrial Average DJIA, +1.23% jumped 212.88 points, or 1.2%, to 17,584.52, with 27 of its 30 components finishing higher.

The Nasdaq Composite COMP, +1.26% ended the day up 57.73 points, or 1.3%, at 4,650.47.

Earlier Wednesday morning, stock futures had been pointing to a strong open ahead of the release of Automatic Data Processing Inc.’s private-sector employment hiring data.

Liz Ann Sonders, chief investment strategist at Charles Schwab, said that Wednesday’s buying action is most likely due to markets being oversold over the past several sessions.

“Global macro factors are still dominating markets, and the bounce in stocks has more to do with somewhat stabilizing oil and euro, than the ADP data,” Sonders said.

She reiterated her outlook that the stock market is in mature stages of a secular bull market, which has more room to climb, but warned that higher volatility will bring more frequent and deeper pullbacks.

Bruce McCain, chief investment strategist at Key Private Bank, offered the best analogy for the market’s recent reaction to plunging oil prices: “It’s like losing weight – a few pounds makes us happy, but a massive weight loss in short time means something is seriously wrong. Investors first cheered positive effects of lower oil, but now are worried that it may be more than just an oversupply shock but rather a slowing global growth.”

He said markets are more than overdue for a correction, but he still sees a case for staying in equities in 2015, arguing that there’s no evidence that the U.S. economy is going into recession.

Data: Private sector employers added 241,000 jobs in December, while November figures were revised upwards. The numbers were far better than anticipated by economists polled by MarketWatch. Some economists say the data should be treated with caution as they have no predictive value for official payrolls due on Friday.

Source : Marketwatch