Stocks Buffeted Between Short-Term Oil Gains, Global Economic Uncertainty

U.S. stocks twitched in volatile trading Tuesday but held up relatively well considering a more than 5% drop for Japan’s Nikkei stock average and general Asian and European market unrest. Mild oil gains emerged despite more bearish supply news and helped to limit the stock market’s retreat.

Stocks are struggling with traction to start the week. Major averages fell sharply on Monday, led by a 1.8% drop for the tech-heavy NASDAQ Composite (COMP). The broader S&P 500 (SPX) shed 1.4%. It’s now down 9% for the year, a step closer to the closely watched 10% marker that stirs talk of bear markets.

Conditions could remain volatile in the lead-up to Wednesday’s and Thursday’s Congressional testimony from Federal Reserve Chair Janet Yellen. She’s addressing the economy and taking lawmaker questions. But, as Wall Street has now priced out strong odds for more interest rate hikes from the Fed this year, any dropped hints on policy from the Fed chief could carry potential trading implications.

Morning JOLT? Several reports tracking the job market rank among those closely watched on Wall Street. Today brings one that has gotten more traction namely because the Fed’s Janet Yellen likes it so much. The U.S. job openings, or JOLTS, report for December is due for release at 10 a.m. Eastern. Yellen has often said it’s one of her favorite economic snapshots; she pays attention to the quit rate, a proxy of worker confidence, included in the report. Last Friday, the latest payrolls report showed smaller-than-expected job growth but an increase in January wages.

Earnings: Consumer Snapshot. The Coca-Cola Co KO shares gained modestly after its adjusted earnings and revenue topped Street expectations, driven by organic growth. Chief Executive Muhtar Kent said the company is planning to accelerate the pace of a streamlining program with plans to refranchise 100% of its company-owned North American bottling territories by the end of 2017, according to MarketWatch. KO also agreed to refranchise its Chinese bottling operations. Fast-food chain Wendy’s Co WEN issued preliminary Q4 results above the Street’s current view and said it anticipates same-store sales growth above what industry analysts were expecting. CVS Health Corp CVS met Street expectations with its earnings, sending shares lower. Sears Holdings Corp SHLD warned of a revenue shortfall and said it is accelerating store closures.

 

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