US stocks up but rally doubts rise
US stocks rose yesterday as commodity-related shares rebounded, but worries remained over how much further the recent rally may continue. Last week a massive sell-off in materials and oil forced investors out of high-risk assets, and stocks ended with weekly losses of about 1pc.
The energy and materials sectors were the best performers on the S&P 500 as the Reuters/Jefferies commodities index jumped 1.8pc. The S&P energy index was up 1.7pc.
Last week's exit from commodities, along with the near-end of first-quarter earnings reports and the Federal Reserve's bond-buying programme has fuelled speculation that the stock market's eight-month rally will slow.
"With the ongoing priming of the US economy by the Federal Reserve, there surely should be some concern over corporate earnings in the aftermath of its last bond purchase in June," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich.
"Corporate earnings are OK at this point, but going forward it could be a long, hot summer for stocks. If we continue to see the commodity markets trading with a heavy heart, the outlook for stocks could quite easily weaken."
Among other worries facing stock investors, S&P downgraded Greece's rating into junk territory on doubts Athens can manage its debt without imposing losses on private bondholders. (Reuters)