Wall Street pares back gains as oil prices reverse course | Reuters - Firstpost
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Wall Street pares back gains as oil prices reverse course | Reuters

Updated: Jan 12, 2016 23:00 IST

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Wall Street pared back early gains on Tuesday as oil prices reversed course, but gains in Apple and healthcare stocks provided support.

Crude prices retreated back towards $30 per barrel, which led to a 0.75 percent drop in the energy sector, making them the worst performing among the 10 major S&P sectors.

Still, stocks held on to gains, with the S&P 500 holding above the key 1900 level and the Nasdaq on track to end a streak of eight straight days of losses.

"We're seeing a bounce here and the reason for that is, from a technical perspective, the S&P got down to that 1900-level (on Monday)," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"We managed to successfully close above it (on Monday) and that's bringing in some buying this morning, just from a very oversold condition."

At 11:09 a.m. ET (1609 GMT), the S&P 500 was up 7.86 points, or 0.41 percent, at 1,931.53. The index dropped to a low of 1901.10 on Monday.

The Dow Jones industrial average was up 50.33 points, or 0.31 percent, at 16,448.9 and the Nasdaq Composite index was up 35.99 points, or 0.78 percent, at 4,673.98.

The day's action will likely be driven by company-specific news, rather than macro-economic conditions, said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

Five of the 10 major S&P sectors were higher, led by the health sector's 0.67 percent increase.

Medtronic's 3.2 percent jump led the gains, while Anthem's raised 2016 profit forecast led a rally in health insurers.

Anthem jumped 5 percent to $134.78, Aetna was up 3.5 percent and Cigna rose 2.7 percent. UnitedHealth increased 1.9 percent, providing the biggest boost to the Dow.

Apple was up 1.2 percent at $99.68 and Intel rose 1.3 percent at $32.48 after positive ratings from BofA Merrill and JP Morgan, respectively.

U.S. stocks have opened higher in the past two sessions, only to reverse course later in volatile trading as investors fretted about a China-led global growth slowdown and sharp turns in oil prices.

Investors are also bracing for a U.S. earnings recession, with fourth-quarter profits expected to decline 4.7 percent, falling for the second straight quarter, according to Thomson Reuters data.

"Expectations for earnings and revenue growth are pretty low right now, so the opportunity to beat expectations is as easy as jumping over a limbo stick," Ablin said.

Declining issues outnumbered advancing ones on the NYSE by 1,513 to 1,423. On the Nasdaq, 1,620 issues rose and 995 fell.

The S&P 500 index showed no new 52-week highs and 22 new lows, while the Nasdaq recorded 10 new highs and 107 lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Savio D'Souza)

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