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Stocks reverse early losses as commodities rise

Stocks reverse early losses as commodities rise

A bounce back in materials and financial companies erased early losses in the U.S. stock market Monday.
Commodities like corn and cotton rose more than 3 percent in morning trading. Those gains helped send materials companies up 1.3 percent, the most of the 10 industry groups that make up the S&P 500 index.
The Dow Jones industrial average rose 41 points, or 0.3 percent, to 12,637 in morning trading. The S&P 500 rose 4, or 0.3 percent, to 1,341. The Nasdaq composite fell 5, or 0.1 percent, to 2,823. The Dow had been down by more than 50 points earlier in the day following an earnings miss by a big retailer and new concerns about Europe's debt crisis.
Home improvement company Lowe's Cos. fell nearly 3 percent in early trading Monday after its quarterly report missed Wall Street's estimates and the company cut its outlook for the year. The company said that its profit fell 6 percent in the first quarter because of the combination of bad weather and a decline in consumer spending.
But J.C. Penny Co. Inc. rose nearly 4 percent after the retailer said that cost-cutting and a line of exclusive merchandise helped its profit rise nearly 7 percent in the first quarter. The company also raised its full year profit estimates.
The U.S. stock market has lost some of its momentum lately after finishing its best first quarter since 1998. Companies in so-called defensive industries like healthcare, utilities and consumer staples have outperformed lately due in part to concerns that high gas prices will slow the economy and cut into corporate profits.
Investors are growing increasingly concerned over the prospect of an unprecedented U.S. default on its debt as well. Treasury Secretary Timothy Geithner told Congressional lawmakers in a letter Monday that the agency is using accounting measures to postpone hitting the federal debt limit until August.
Stocks in Europe fell broadly after the arrest of the head of the IMF in New York on charges he sexually attacked a hotel maid. The official, Dominique Strauss-Kahn, had been heavily involved in trying to solve the debt crises in Portugal and Greece. The Euro Stoxx 50, an index of large companies in countries that use the euro, lost 1.1 percent. Greece's stock market fell nearly 2 percent.
In the U.S., the parent company of the New York Stock Exchange dropped nearly 11 percent after competitors Nasdaq OMX Group and ICE announced that they had withdrawn their hostile bid for the company. NYSE Euronext had angered its shareholders by refusing to meet with the two companies, which offered a higher price than what NYSE received from a German exchange operator. The withdrawn offer clears one hurdle to the proposed combination of the NYSE and its German counterpart.
Oil was among the few commodities that did rise Monday, falling 0.5 percent to remain below $100 a barrel. The drop in oil prices has helped airline companies because it cuts one of their biggest costs. AMR Corp., the parent company of American Airlines, gained 5 percent. JetBlue Airways Corp. and Delta Air Lines also rose more than 3 percent.
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Updated : 2021-01-24 18:45 GMT+08:00