Publications
Partners
New York - US stocks staged a late-day reversal on Wednesday, rallying into the close as a sharp rise in materials shares boosted the S&P 500 and gains in Apple helped lift the Nasdaq.
The action shortly before the market's close was a mirror image of Tuesday when stocks gave up gains in the last minutes of trading. The late rebound suggested investors saw value in the market after the S&P 500 fell just below 1,300.
But one trader warned not to read too much into the move that lifted the indexes near breakeven for the day.
"I don't make anything of this. Volumes are very low, so there's no conviction," said Todd Schoenberger, managing principal at the BlackBay Group in New York. "We're only hearing what we want to hear. Don't be surprised if futures are disappointed tomorrow."
Towards the close traders cited rumors that the European Union was considering a proposal to guarantee bank deposits across the bloc. Such a move could assuage fears of bank runs in Spain and Greece. The rumors, which one trader said may have originated in London, appeared to be unfounded.
Shares in beaten-down materials companies led the S&P 500. The S&P's materials sector gained 1.1%. Alpha Natural Resources gained 5% to $11.70. Boosting the Nasdaq were shares of Apple, up 2.4% to $570.56.
In the overall market, the Dow Jones industrial average dipped 6.66 points, to 12,496.15. The S&P 500 Index edged up 2.23 points, to 1,318.86. The Nasdaq Composite gained 11.04 points, to 2,850.12.
For most of the day shares fell by more than 1% as EU officials said eurozone countries must prepare contingency plans for a possible Greek exit of the currency bloc, while a weak outlook from Dell cast doubts about the strength of global tech spending.
Shares in Dell tumbled more than 18% and hit other tech stocks as the revenue forecast from the third-largest computer maker spurred fears that global tech spending was declining faster than thought.
Hewlett-Packard slid more than 3% before its quarterly results but rose 3.6% in extended trading after releasing its report.
The agreement by eurozone officials on contingency planning for a Greek exit of the eurozone, or "Grexit," as some investors are now calling it, came during a teleconference of the Eurogroup Working Group on Monday, sources told Reuters.
Eric Kuby, chief investment officer at North Star Investment Management in Chicago, said renewed concerns about Greece, worrying outlooks from Dell and others, worries about the economy, Facebook's disappointing IPO and JPMorgan's recent trading loss were creating significant headwinds.
"It has made people less likely to jump in there and buy stocks," he said. "A lack of good news, some bad news and these worries that have been around for a long time make it hard to get a rally going."
The S&P 500 is down 7% from a peak in April but is up 4.9% for the year so far. Some analysts are expecting the index to test its 200-day moving average at around 1,280, another 2% below current levels.
Dell plunged 17.2% to $12.49, its biggest one-day drop in more than a decade. Hewlett-Packard lost 3.2% to $21.08.
Facebook and banks, including Morgan Stanley , were sued by the social networking leader's shareholders, who claimed the defendants hid Facebook's weakened growth forecasts ahead of its $16bn initial public offering. The stock was up 3.2% at $32 after falling more than 30% from it peak on Friday.
Falling oil prices also depressed the energy sector, with an S&P index of energy companies edging up 0.4% into the close.
US July crude oil future fell $2.30 to a session low of $89.55, trading below $90 a barrel for the first time since November 1, on easing concerns about Iran's nuclear dispute with the West and increasing worries about global economic growth.
