S&P snaps win streak, still a green ’15 for Nasdaq

October 07 01:54 2015

After a strong two-day rally that lifted the major U.S. stock indexes out of correction territory and well off their lows hit in August, stocks ended mixed Tuesday as Wall Street reassessed the outlook for stocks for the rest of 2015. All the major U.S. stock indexes, which bounced sharply Friday after sinking near the panic lows in August and followed up with a big rally Monday when the Dow surged more than 300 points, traded cautiously.new-study-says-you-can-predict-the-stock-market-with-google

The Dow Jones industrial average ended up about 14 points, or 0.1%, after gaining as much as 90 earlier. The Standard & Poor’s 500, which was riding a five-session win streak, its longest of the year, closed down 0.4%. The Nasdaq composite lost 0.7% to remain a few points above its 2014 close. Wall Street, after fretting over the stock market’s first 10% correction in four years, has enjoyed a relief rally in recent sessions. Fueling the recent gains, which picked up steam Friday after a weak September jobs report reduced the odds of a interest rate hike later this year from the Federal Reserve, is the belief that stocks will benefit from 0% rates for longer, perhaps into early 2016.

Traders have also gotten a reprieve from China, where markets have been closed this week for a holiday, which has reduced market volatility in Asia. Some Wall Street pros believe a year-end rally has begun, while others remain cautious and argue that it’s still too early to conclude the worst of the recent market volatility is over.

The next challenge for Wall Street is the upcoming earnings season. While analysts are projecting profit growth for the S&P 500 to contract, there’s a growing sense that the earnings bar has been set so low that Corporate America will be able to top the lowered forecasts, giving the broad market a lift in the process. Earlier Tuesday, snack and soft drink giant Pepsico (PEP) gave the market a lift when it topped earnings and revenue targets and also lifted its outlook for the rest of the year. Pepsico shares were up about 2% in early trading.

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