The stock markets in the United States extended gains today driven by the continued recovery of equities in the energy sector, which suffered a selloff in August. The energy companies recovered approximately 23% of stock value, but the sector is still down around 10% year-to-date.

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In an interview with Bloomberg, Michael Antonelli, an institutional equity sales trader at Robert W. Baird & Co. said, “When you see energy and cyclicals continue to rally like this it’s because they’re under-owned sectors. They’re the sectors that were left for dead. When you get these pain-trade rallies like we’re seeing right now, those are the sectors that people go to because they’re under-owned.”

Eric Wiegand, a senior portfolio manager at US Bank Wealth Management, commented, “I think there has been a real desire on the part of some investors to take advantage of depressed valuations.”

Investors are focusing their attention on corporate earnings and transactions while evaluating whether the stock market rebound is the beginning of market rally until the end of the year.

[drizzle]In general, U.S. companies reported better-than-expected quarterly financial results this earnings season. Seventy percent (70%) of the 379 S&P companies (that already released financial results) posted earnings that beat consensus estimates.

Bill Schultz, chief investment officer at McQueen, Ball & Associates, told Bloomberg, “We’re back to where we were before that downturn took place, with reasonable earnings, modest growth and low-interest rates. That’s a backdrop that’s allowing upward momentum to re-enter the market. All of the fears built into the market in August and September haven’t come to fruition.”

U.S. Markets

  • Dow Jones Industrial Average (DJIA) – 17, 918.62 (+0.50%)
  • S&P 500- 2,109.78 (+0.27%)
  • NASDAQ- 5,145.13 (+0.35%)
  • Russell 2000- 1,192.11 (+0.51%)

European Markets

  • EURO STOXX 50 Price EUR- 3,442.68 (+0.24%)
  • FTSE 100 Index- 6,383.61 (+0.34%)
  • Deutsche Borse AG German Stock Index DAX- 10,951.15 (+0.00%)

Asia-Pacific Markets

  • Nikkei 225- 18,683.24 (-2.10%)
  • Hong Kong Hang Seng Index- 22,568.43 (+0.89%)
  • Shanghai Shenzhen CSI 300 Index- 3,239.22 (+1.42%)

Stocks in Focus

Archer Daniels Midland declined more tha 6% to $43.15 per share. The company reported that its earnings and revenue declined for the quarter ended September 30. According to Archer Daniels Midland, its earnings dropped from $1.14 per share to $0.41 per share. Its revenue fell more than 8% to $16.57 billion.

The shares of Fitbit dropped more than 8% to $37.31 per share despite reporting strong quarterly financial results. The company’s stock was negatively impacted by its plan to offer additional shares.

The stock price of King Digital Entertainment surged more than 14% to $17.83 per share. The company agreed to be acquired by Activision Blizzard for $5.9 billion. The shares of Activision Blizzard also climbed more than 3% to $35.81 each.

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