Tag Archives: Stock Market

S&P 500, Dow Jones at Record Highs

raders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 12, 2016

(Reuters) – The S&P 500 and the Dow set new all-time highs at the open on Wednesday as investor optimism rose amid signs of a steadying global economy.

The Dow Jones Industrial Average rose 37.46 points, or 0.2 percent, to 18,385.13. It hit a record of 18,390.16.

The S&P 500 gained 3.81 points, or 0.18 percent, to 2,155.95. It hit a record of 2,156.45.

The Nasdaq Composite added 9.77 points, or 0.19 percent, to 5,032.59.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)

Stocks drop for second day after Brexit vote

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S.

NEW YORK (Reuters) –

Wall Street tumbled again on Monday after Britain’s shock vote to leave the European Union, sending major U.S. stock indexes to their worst two-day swoon in about 10 months.

The Dow Jones industrial average fell 260.3 points, or 1.5 percent, to 17,140.45, the S&P 500 lost 36.85 points, or 1.81 percent, to 2,000.56 and the Nasdaq Composite dropped 113.54 points, or 2.41 percent, to 4,594.44.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

 

Dollar drops to eight-month low as commodity currencies climb

Dollar Bills

By Jemima Kelly

LONDON (Reuters) – The dollar fell to its weakest since late August against a basket of currencies on Tuesday, while commodity-linked currencies climbed, as a rise in oil prices whetted investors’ appetite for riskier assets across financial markets.

The greenback has been subject to a heavy sell-off over the past month, losing 5 percent <.DXY> as investors have pushed back their expectations for when the Federal Reserve will raise U.S. interest rates after Chair Janet Yellen threw into doubt the view there could be two hikes this year.

Fed funds futures <0#FF:> imply barely one quarter point increase for the whole of 2016, with only about a 20 percent chance of a hike in June priced in.

The dollar index <.DXY>, which measures the greenback against a basket of six major currencies, fell to as low as 93.627.

With a rise in commodity prices and rallying global stocks boosting investors’ assets for riskier assets, commodity-linked currencies such as the Australian dollar <AUD=D4> and Norwegian crown <NOK=> gained strongly against their U.S. counterpart, further bruising the greenback.

“It appears that for now, markets are turning their noses up at the prospect that more gloomy earnings that might trigger some more negative risk sentiment,” said Rabobank currency strategist Jane Foley in London, adding that the dollar’s sell-off looked a little “overdone”.

Against the safe-haven yen, though, the dollar strengthened 0.3 percent, having hit a 1-1/2-year low of 107.63 yen <JPY=D4> on Monday. The yen had its strongest start to a year since 2008 in the first quarter <JPY=> as shaky global markets boosted demand for the traditional safe-haven currency.

Those gains prompted Japanese officials to warn on Monday that the yen moves were “one-sided and speculative” and that the government stood ready to intervene to weaken the currency.

But with oil prices hitting a 2016 high above $43 per barrel on Tuesday and risk appetite on the rise, the yen needed no such intervention to drive it lower. [O/R]

“(Higher) oil prices … have got the dollar on the back foot, more than anything else, so we have the yen and the dollar at the bottom, and everything else at the top,” said Kit Juckes, macro strategist at Societe Generale in London.

“I think dollar/yen will get back to 120 at some point – we might want to sell it again there, but I think this move is way overdone,” he added.

As the dollar sold off, the euro touched a six-month high of $1.1465 <EUR=>.

(Additional reporting by Ian Chua in Sydney and Hideyuki Sano in Tokyo; Editing by Andrew Heavens)

Wall Street rally fizzles out as oil, materials fall

(Reuters) – Wall Street closed lower on Wednesday as oil and materials share prices dropped while investors remained cautious a day after deadly bombing attacks in Belgium.

The benchmark S&P 500 index fell back into negative territory for the year after closing positive on Friday for the first time in 2016.

U.S. stocks’ fading five-week rally was further diminished by comments over the past two days by Federal Reserve officials, who expressed views that suggested an appetite for more U.S. interest rate hikes than investors had anticipated.

The possibility of more than the two expected rate hikes through December has sent the dollar higher, pushing down commodity prices.

“That’s basically what’s leaning on the market today,” said Peter Cardillo, Chief Market Economist at First Standard Financial in New York. “It’s all about commodities.”

Gold and metals prices fell as the dollar strengthened.

U.S. oil prices also were also damaged after data showing a rise in U.S. stockpiles last week rekindled worries about a global glut.

Eight of the 10 major S&P sectors were lower, led by a 2.1-percent fall in the energy sector. Chevron and ConocoPhillips were among the biggest decliners. Utilities rose 0.7 percent and was the best performing sector.

The Dow Jones industrial average closed down 79.98 points, or 0.45 percent, to 17,502.59, the S&P 500 lost 13.09 points, or 0.64 percent, to 2,036.71 and the Nasdaq Composite fell 52.80 points, or 1.1 percent, to 4,768.86.

Adding to the downturn, investors were deterred by the shortened trading week ahead of the Good Friday holiday and uncertainty tied to Tuesday’s bombings in Brussels, Cardillo said.

Earnings weakness has been another concern for investors, with first-quarter S&P 500 earnings forecast to fall 6.9 percent from a year ago, according to Thomson Reuters data.

Nike shares were down 3.8 percent at $62.44 after the world’s largest footwear maker reported quarterly revenue below estimates.

Gilead Sciences was down 3.9 percent at $90.08 while Merck was up 0.09 percent. A federal jury upheld the validity of two Merck patents in a high-profile dispute over Gilead’s blockbuster cure for hepatitis C.

Gilead was the biggest drag on the S&P 500 and the Nasdaq.

Vertex Pharmaceuticals fell 7.6 percent to $80.15 after Goldman Sachs cuts its price target on the stock.

Yum Brands was up 2 percent at $80.55 after the Wall Street Journal reported that the fast-food chain’s owner was in talks with KKR about a possible sale of a 19.9-percent stake in its China business.

Volume was lighter than in recent sessions. About 6.8 billion shares changed hands on U.S. exchanges, compared with the 8.1 billion daily average for the past 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by 2,257 to 771, for a 2.93-to-1 ratio on the downside; on the Nasdaq, 2,221 issues fell and 579 advanced for a 3.84-to-1 ratio favoring decliners.

The S&P 500 posted 17 new 52-week highs and no new lows; the Nasdaq recorded 21 new highs and 40 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski and James Dalgleish)

Global stocks recover from early selloff following Brussels attacks

NEW York (Reuters) – Global equity markets were little changed, regrouping from early losses while safe-haven gold and government bonds eased from higher levels on Tuesday following attacks on the airport and a rush-hour metro train in Brussels.

Islamic State claimed responsibility for suicide bomb attacks in the Belgian capital that killed at least 30 people, with police hunting a suspect who fled the air terminal.

Travel sector stocks, including airlines and hotels, were among the hardest-hit, although equities managed to recover from sharp losses and bonds and gold eased from their early highs.

On Wall Street, the NYSEArca airline index lost 0.9 percent and was on track for its first decline in five sessions. Cruise ship operators Royal Caribbean, down 2.9 percent and Carnival Corp, down 2.1 percent, were among the worst performers on the S&P 500.

Those declines were offset by gains in Apple, up 0.8 percent to $106.72 and a 0.9 percent gain in the healthcare sector.

“The news obviously has been dominated by what has gone on in Brussels, but experience tells us not only is it the morally right thing to do to basically not overreact, it also turns out to be the most profitable thing to do,” said David Kelly, chief global strategist at JPMorgan Funds in New York.

“The objective of terrorists is to disrupt and, to the extent that they can, do horrible things but at least we have the small victory that they have not disrupted global financial markets today.”

The Dow Jones industrial average fell 41.3 points, or 0.23 percent, to 17,582.57, the S&P 500 lost 1.8 points, or 0.09 percent, to 2,049.8 and the Nasdaq Composite added 12.79 points, or 0.27 percent, to 4,821.66.

The FTSEuroFirst 300 index of leading shares closed down 0.12 percent at 1,338.20, rebounding from a 1.6 percent drop. Belgian stocks rose 0.17 percent after having been down as much as 1.4 percent. MSCI’s index of world shares edged down 0.03 percent.

In Europe, the STOXX Europe 600 Travel & Leisure index was down 1.8 percent. Shares in major European airlines like Ryanair and Air France-KLM also fell.

Volume is expected to continue to diminish ahead of the Easter holiday, and investors were beginning to think about cashing in on a steep rally in stocks over the last few weeks.

Gold was up 0.31 percent at $1,248.10 an ounce after hitting a high of $1.259.60 earlier.

Benchmark U.S. 10-year notes were last down 6/32 in price to yield 1.9403 percent after falling as low as 1.879 percent as Chicago’s Federal Reserve president struck a bullish tone on the U.S. economy.

In currency markets, the Japanese yen, regarded by investors as a shelter from turbulence, pulled back from early gains, notably against the euro. The euro was last up 0.14 percent at 126.01 yen and the dollar turned positive, up 0.3 percent at 112.27 yen.

The euro fell 0.16 percent against the dollar to $1.1221. The dollar was up 0.33 percent to 95.606 against a basket of major currencies.

Oil prices also steadied after the initial rush to safer assets, with U.S. crude settling down 0.17 percent to $41.45 a barrel while Brent rebounded from a low of $40.97 to settle up 0.6 percent at $41.79.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski and Dan Grebler)

Ride to the Bottom: U.S. energy workers hit hard by company stock bets

OKLAHOMA CITY (Reuters) – Nearly 15 years since Enron’s collapse decimated the retirement accounts of its employees, hundreds of thousands of U.S. energy workers remain precariously exposed to big, concentrated bets on company stock in their 401(k) retirement plans.

The slide in oil prices to their lowest levels in over a decade wiped out several billion dollars of retirement wealth in the energy sector in the past year. The losses may prove temporary for companies that successfully navigate the crisis, but tens of thousands of employees of struggling firms may see much of their nest eggs gone for good.

In Oklahoma and Texas, workers are delaying retirement plans, surrendering trucks, cars and land in personal bankruptcy cases, or just praying oil prices will recover.

“I just didn’t see it coming,” said John Thompson, 57, who was laid off in February from Oklahoma City-based SandRidge Energy Inc. SandRidge shares, which peaked above $65 in 2008, are now worth 10 cents apiece. “Because of this, I’m not retiring any time soon.”

SandRidge did not return messages seeking comment.

Almost without exception energy company 401(k) plans offered at least 10 different investment alternatives to company stock, their plans show.

Yet company reports and interviews with more than 20 current and former employees at independent energy firms show many employees have not taken advantage of opportunities to switch out of company shares.

Maureen Nelson, who retired from Chesapeake Energy Corp in 2013, said she lost an estimated $100,000 as she watched the company’s shares plunge in value.

Inertia and a strong faith in company leadership played a role in holding on to company stock, but so did company policies.

Many energy firms continued to match employee contributions with company stock, even as most large U.S. companies stopped the practice after the Enron debacle, according to several corporate benefits consultants.

The energy industry followed the lead of heavyweights such as Chevron Corp and Exxon Mobil Corp, which for years provided matching contributions in company stock in worker 401(k) retirement plans while also funding separate defined benefit pension plans for them.

DOUBLE IMPACT

Smaller companies could not afford to do both, but they typically matched employee contributions in stock. And energy workers often plowed some or most of their own contributions into company stock, benefits consultants said.

“It’s not prudent investing,” said Lou Harvey, chief executive of Boston-based financial research firm Dalbar Inc. “But employees tend to clamor for company stock.”

Typically, workers at larger energy companies would have 20 percent to 60 percent of 401(k) assets in company stock, according to a Reuters analysis of such holdings for more than 400,000 employees.

By contrast, the average U.S. 401(k) plan has about 7 percent of assets in company stock, according to Washington D.C.-based Investment Company Institute.

At Chevron, more than 40,000 participants in its 401(k) plan held $8.9 billion, or 47 percent of investment assets, in company stock at the end of 2014, according to the latest annual report.

Chevron stopped matching in company stock last year for better diversification, spokeswoman Melissa Ritchie said. Exxon stopped new stock contributions after 2006. Its shares still accounted for $12.9 billion of the 401(k) plan’s $22.3 billion in assets in 2014. Exxon declined comment.

When Texas-based Enron filed for bankruptcy in 2001, employees suffered a one-two punch – they lost their jobs and much of their savings because nearly two-thirds of their retirement assets were in Enron stock.

After Enron’s collapse, companies successfully lobbied Congress mostly against proposals to limit company stock ownership in 401(k) plans, fearing billions of dollars of their shares would be offloaded to meet the caps.

“Caps were a bridge too far for companies,” said Sheila Bair, former chair of the Federal Deposit Insurance Corporation and a U.S. Treasury official who worked on President George W. Bush’s 2002 task force on retirement security.

Still, publicly-traded companies have revamped their retirement plans to make them more balanced, even imposing own limits on company stock ownership, said Rob Austin, director of retirement research at Aon Hewitt.

FOLLOW THE LEADER

Diversification has yet to reach much of the energy sector, though. Oil and gas workers had more than $32 billion in company stock in their 401(k) accounts, or about 38 percent of plan assets for the 40 companies in the S&P 500 Energy Sector Index, according to 2014 annual reports filed with the U.S. Department of Labor. Since then, the index has lost 21 percent. Smaller independents have been hit about twice as hard, on average.

With about a third of his 401(k) plan in company stock, retired Chesapeake geologist Keith Rasmussen, 61, looks to sell land he owns in Oklahoma and Idaho to shore up his depleted retirement funds.

Chesapeake, once a shale boom darling, now trades 84 percent below mid-2014 levels, hurt by heavy debt and prolonged slump in natural gas prices. Nearly 8,000 participants in its 401(k) are exposed to the reversal of fortune, holding 35 percent of the plan’s $615 million in assets in company stock at the end of 2014, according to the latest annual report.

Some current and former Chesapeake employees said their decisions to hold onto stock were based partly on their reverence for Aubrey McClendon, its legendary former chief executive, who died in a car crash in early March

“You could be the biggest skeptic in the world, and you listen to him in a room for 30 minutes, and you’re ready to hand him all your money,” said Ginni Kennedy, 58, who retired from her engineering job at Chesapeake in 2013. “I had faith that he’d continue to be able to pull those rabbits out of his hat.”

Chesapeake, which declined to comment, stopped matching in company stock last year.

Many workers are now paying a heavy price for failing to heed warnings about concentration risk.

“Our bankruptcy work has quadrupled over the past six months,” said Roger Ediger, an Enid, Oklahoma lawyer who handles personal bankruptcy cases. “Most of them are energy related.”

A U.S. Supreme Court decision in 2014 underscored the risk of offering company shares in 401(k) plans. Its decision made clear that company stock was not automatically a prudent investment.

The ruling also highlighted the potential conflicts of interest for companies in their role as fiduciary of 401(k) plans.

“It was a wake-up call to companies,” said Bill Ryan, chief fiduciary officer at Evercore Trust, the largest U.S. third-party fiduciary.

At Fort Worth, Texas-based Quicksilver Resources Inc, Evercore Trust took a rare step to block further employee investment in the company’s 401(k) plan in October 2014, as fiduciary for the stock plan. The move preserved some value, but not much, given that by the time the stock fund was liquidated company shares have already fallen to about 50 cents from about $3.50 in 2014. Equity investors lost virtually everything five months later when Quicksilver filed for bankruptcy protection.

Bair, now a college president, said companies with heavy stock concentrations in their 401(k)s should follow peers that have caps in place to protect workers and avoid government mandates.

“If we have another failure like Enron, government regulation may be coming.”

(Reporting By Tim McLaughlin and Luc Cohen; Editing by Tomasz Janowski)

Global stocks dip, dollar strengthens on Federal Reserve talk

NEW YORK (Reuters) – Global equity markets edged lower on Monday as the dollar strengthened and U.S. Treasury yields rose on hawkish commentary from several Federal Reserve officials.

Richmond Fed President Jeffrey Lacker said U.S. inflation is likely to accelerate in the coming years and move toward the Federal Reserve’s 2 percent target, while San Francisco Fed President John Williams told Market News International he would advocate for another interest rate hike as early as the April meeting.

In addition, Atlanta Fed President Dennis Lockhart said the Fed may be in line for a rate hike as soon as April, as last week’s decision to hold rates steady was more about ensuring that recent global financial volatility had settled down.

“He (Lockhart) reiterated that every meeting is a ‘live’ meeting going forward and I think that overall somewhat hawkish tone to his comments is largely what’s helping support the dollar this afternoon,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.

The dollar rose 0.29 percent to 95.357 against a basket of major currencies. The greenback had fallen in the three prior weeks for a decline of 3.1 percent.

The currency fell last week when Fed policymakers revised down the number of times they expect to raise interest rates this year to two from four.

Benchmark 10-year notes were last down 13/32 in price to yield 1.9173 percent, from 1.87 percent on Friday.

The stronger dollar weighed on European equities, with the pan-European FTSEurofirst stock index closing down 0.25 percent to start a week shortened by the Easter break.

U.S. stocks were little changed as investors looked for fresh catalysts after a five-week rally that pushed the benchmark S&P 500 into positive territory for the year.

The Dow Jones industrial average rose 21.77 points, or 0.12 percent, to 17,624.07, the S&P 500 gained 2.02 points, or 0.1 percent, to 2,051.6 and the Nasdaq Composite added 13.23 points, or 0.28 percent, to 4,808.87.

MSCI’s index of world shares shed 0.14 percent.

Crude oil prices rose, as Brent settled up 0.8 percent at $41.54 and WTI settled up 1.19 percent at $39.91 a barrel, as data showed a drawdown at the Cushing, Oklahoma delivery hub for U.S. crude. Gains were curbed, however, by concerns U.S. oil drillers could ramp up output after a two-month rally in crude.

Gold fell 0.91 percent to $1,243.60 an ounce as the dollar advanced, its third straight decline, but the metal was underpinned by expectations the ultra-low interest rate environment would persist on a global level.

Copper climbed 0.12 percent to $5,048 a tonne on expectations of stronger demand in top consumer China after a jump in imports of refined copper by the world’s second-largest economy.

Sterling fell 0.73 percent to $1.4373 as worries mounted over Prime Minister David Cameron’s ability to keep his Conservative party together and keep Britain in the European Union after Iain Duncan Smith, a leading voice for the UK to exit the EU, resigned from the cabinet late on Friday.

The euro slipped 0.24 percent to trade at $1.124.

(Additional reporting by Dion Rabouin; Editing by Dan Grebler and Bernadette Baum)

China central bank to Federal Reserve: A little help, please?

WASHINGTON (Reuters) – Confronted with a plunge in its stock markets last year, China’s central bank swiftly reached out to the U.S. Federal Reserve, asking it to share its play book for dealing with Wall Street’s “Black Monday” crash of 1987.

The request came in a July 27 email from a People’s Bank of China official with a subject line: “Your urgent assistance is greatly appreciated!”

In a message to a senior Fed staffer, the PBOC’s New York-based chief representative for the Americas, Song Xiangyan, pointed to the day’s 8.5 percent drop in Chinese stocks and said “my Governor would like to draw from your good experience.”

It is not known whether the PBOC had contacted the Fed to deal with previous incidents of market turmoil. The Chinese central bank and the Fed had no comment when reached by Reuters.

In a Reuters analysis last year, Fed insiders, former Fed employees and economists said that there was no official hotline between the PBOC and the Fed and that the Chinese were often reluctant to engage at international meetings.

The Chinese market crash triggered steep declines across global financial markets and within a few hours the Fed sent China’s central bank a trove of publicly-available documents detailing the U.S. central bank’s actions in 1987.

Fed policymakers started a two-day policy meeting the next day and took note of China’s stock sell-off, according the meeting’s minutes. Several said a Chinese economic slowdown could weigh on America.

Financial market contagion from China was one of the reasons cited by the Fed in September when it put off a rate hike that many analysts had expected, a sign of how important China has become both as an industrial powerhouse and as a financial market.

NO SECRETS

The messages, which Reuters obtained through an Freedom of Information Act request, show how alarmed Beijing has become over the deepening financial turmoil and offer a rare insight into one of the least understood major central banks.

The exchanges also show that while the two central banks have a collegial relationship, they might not share secrets even during a crisis.

“Could you please inform us ASAP about the major measures you took at the time,” Song asked the director of the Fed’s International Finance Division, Steven Kamin in the July 27 email.

The message registered in Kamin’s account just after 11 a.m. in Washington. Kamin quickly replied from his Blackberry: “We’ll try to get you something soon.”

What followed five hours later was a 259-word summary of how the Fed worked to calm markets and prevent a recession after the S&P 500 stock index tumbled 20 percent on Oct. 19, 1987.

Kamin also sent notes to guide PBOC officials through the many dozens of pages of Fed transcripts, statements and reports that were attached to the email.

All of the attached documents had long been available on the Fed’s website and it is unclear if they played a role in shaping Beijing’s actions.

Kamin’s documents detail how the Fed began issuing statements the day after the market crash, known as Black Monday, pledging to supply markets with plenty of cash so they could function.

By the time Song wrote to Kamin, China had spent a month fighting a stock market slide and many of the actions taken by the PBOC and other Chinese authorities shared the contours of the Fed’s 1987 game plan.

DESPERATE MEASURES

The July 27 plunge in the Shanghai Composite Index was the biggest one-day fall since 2007 and by then the market had lost nearly a third of its value over six weeks.

China’s central bank had already cut interest rates on June 27 in similar fashion to the Fed’s swift move to ease short-term rates in 1987.

Song told Kamin the PBOC was particularly interested in the details of the Fed’s use of repurchase agreements to temporarily inject cash into the U.S. banking system in 1987.

The PBOC had increased cash injections in June and ramped up repurchase agreements in August as stocks continued to slide. The PBOC also eased policy on Aug. 11 by allowing a 2 percent devaluation in the yuan currency.

As Song and Kamin exchanged messages on July 27 and 28, other Chinese authorities were busy trying to contain the crash.

China’s securities regulator said on July 27 it was prepared to buy shares to stabilize the stock market and that authorities would deal severely with anyone making “malicious” bets that stocks would fall.

In 1987, the Fed contacted banks directly and encouraged them to meet “legitimate funding needs” of their customers, according to Kamin’s email to Song.

In addition to its pledges and cajoling, the U.S. central bank in 1987 eased collateral restrictions on Wall Street and tried to calm markets by intervening in trading earlier than normal. The U.S. economy continued to grow, eventually entering recession in 1990.

The central bank in Beijing does not have as free a hand to conduct policy as does the Fed, which answers to the U.S. Congress but operates independently from the administration.

The PBOC governor Zhou Xiaochuan implements policies ultimately decided by political leaders in Beijing and lacks the authority to lead debate or shed light on decision-making.

China’s vice finance minister told Reuters last year Chinese supervisors needed to learn from countries like the United States.

Premier Li Keqiang said last month China’s regulators did not respond sufficiently but China had fended off systemic risks.

U.S. central bankers say their relative transparency helps their effectiveness and legitimacy, but open records laws also make Fed officials cautious about their communications, much of which must be made public when requested. Fed Vice Chairman Stanley Fischer has said transparency makes it harder for policymakers to have informal discussions.

Kamin pointed out in his email that everything he was sending was publicly available.

“I hope this is helpful,” he said.

(Reporting by Jason Lange in Washington; Additional reporting by Kevin Yao in Beijing; Editing by Tomasz Janowski)

Global stocks post longest streak of gains in two years; dollar firms

NEW YORK (Reuters) – The S&P 500 closed in positive territory for the year for the first time in 2016, leading a gauge of stocks across major markets to a fifth week of gains, its longest weekly run in more than two years.

The dollar, meanwhile, edged up on Friday but ended the week lower against a basket of major currencies, giving a weekly boost to energy and other commodity prices. The U.S. currency fell for a third consecutive week, most recently weighed by the Federal Reserves’ resetting of market expectations on the number of times it will raise rates in 2016.

Oil prices slipped after hitting 2016 peaks.

On Wall Street, the S&P 500 closed above the level where it ended last year for the first time. Healthcare and financial sector stocks were among the leaders, a welcome signal of rotation for stock bulls.

With the fear of a U.S. recession mostly in the rear-view mirror, investors want to add to stock exposure and are buying up the year’s worst performers, according to Art Hogan, chief market strategist at Wunderlich Securities in New York.

“You want to see sector rotation into the laggards,” he said, noting that the rise to positive territory for the S&P 500 could mean the five-week stocks rally could lose steam.

“What we’ve seen is enough good news to say we’re not going into recession. This is a short-term top in a longer-term bull market.”

The Dow Jones industrial average rose 120.81 points, or 0.69 percent, to 17,602.3, the S&P 500 gained 8.97 points, or 0.44 percent, to 2,049.56 and the Nasdaq Composite added 20.66 points, or 0.43 percent, to 4,795.65.

The CBOE Volatility Index a measure of the price traders pay for protection against a slide on the S&P 500, closed at its lowest level since mid-August.

MSCI’s index of stocks in major developed markets gained 1.4 percent this week to end a fifth straight positive week, a streak not seen since February 2014. Stocks in emerging markets jumped 3.2 percent in their third straight weekly advance.

DOLLAR TICKS UP ON SHORT-COVERING

The dollar index bounced back from a five-month low, rising against most major currencies, as traders covered short bets triggered by the Fed’s statement on Wednesday.

The yen gave back 0.2 percent versus the dollar after hitting its strongest since October 2014 on Thursday. The euro slipped 0.4 percent to $1.127.

On Friday, the European Central Bank’s chief economist, Peter Praet, indicated the ECB could further loosen monetary policy.

“It’s been a dizzying selloff for the dollar, so it’s natural that you’re going to get some kind of bounce,” said FX Analytics partner David Gilmore in Essex, Connecticut.

A rising dollar in 2015 weighed on the global economy, and its recent decline has helped push up oil and other commodity prices.

U.S. crude prices slipped after trading above $41 a barrel for the first time since early December as the weekly U.S oil rig count rose for the first time since December. U.S. crude <CLc1> settled up for a fifth straight week.

Brent crude’s front-month contract fell 0.2 percent to $41.47 a barrel after touching a 2016 high of $42.54.

The benchmark U.S. Treasury note rose 7/32 in price to yield 1.8784 percent.

Spot gold closed the week up 0.5 percent after earlier gaining as much as 1.8 percent from last Friday.

Copper posted its highest weekly closing level since October.

(Reporting by Rodrigo Campos, additional reporting by Dion Rabouin, Gertrude Chavez-Dreyfuss, Barani Krishnan and Laila Kearney; Editing by Dan Grebler)

Dow Jones closes positive for year as commodities rally, dollar dives

NEW YORK (Reuters) – Wall Street moved higher on Thursday, pushing the Dow Jones industrial average into positive territory for the year, as commodity prices rose on the back of a weaker U.S. dollar to boost shares in the energy and materials sectors.

The Dow’s move into positive territory came a day after the U.S. Federal Reserve took a dovish stance that weighed on the dollar.

“It was a weak dollar rally,” said John Augustine, chief investment officer at Huntington National Bank. “It took up groups associated with a weaker dollar.”

The top performing sectors in the S&P 500 were materials, industrials and energy.

The rally was a “continued reaction from the Fed’s move,” said David Lefkowitz, senior equities analyst at UBS Americas Wealth Management in New York.

The Fed on Wednesday pointed to moderate U.S. economic growth and strong job gains but cautioned about risks from an uncertain global economy.

The central bank pointed to the possibility of two more rate hikes before the end of the year, having laid out four hikes in 2016 when it raised rates in December.

The Dow and S&P were at their highest since Dec. 31 and the Nasdaq hit its highest since Jan. 7.

For the blue-chip Dow, which includes stocks like GE and Goldman Sachs, the past five weeks’ rally has now clawed back the deep losses that kicked off the year.

Investors’ fears that the U.S. economy could be headed for another recession have faded into the background at least temporarily.

“It’s a pretty equity-friendly backdrop,” Lefkowitz said.

The Dow Jones industrial average closed up 155.73 points, or 0.9 percent, at 17,481.49. The S&P 500 gained 13.37 points, or 0.66 percent, to 2,040.59 and the Nasdaq Composite added 11.02 points, or 0.23 percent, to 4,774.99.

U.S. crude settled up 4.5 percent at $40.20 a barrel on optimism that major producers will strike an output freeze deal next month amid rising crude exports and gasoline demand in the United States..

Healthcare was the only decliner among the 10 major S&P 500 sectors. It fell 1.05 percent, dragged down by Eli Lilly’s 4.7-percent fall.

Industrials gained 2 percent, propped up by General Electric’s 2.6-percent rise to $30.96. The stock gave the biggest boost to the S&P 500.

FedEx rose 11.8 percent at $161.34 after the package delivery company forecast better-than-expected full-year earnings.

Endo International dropped 12.5 percent at $29.68, after the drugmaker forecast first-quarter results below estimates.

About 8.2 billion shares changed hands on U.S. exchanges, above the 8.02 billion average over the last 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by 2,473 to 595, for a 4.16-to-1 ratio on the upside; on the Nasdaq, 1,927 issues rose and 872 fell for a 2.21-to-1 ratio favoring advancers.

The S&P 500 posted 61 new 52-week highs and 6 new lows; the Nasdaq recorded 73 new highs and 74 new lows.

(Additional reporting by Abhiram Nandakumar; Editing by Nick Zieminski)