Stocks rebound after another pullback

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Equities are rebounding today from another sharp drop yesterday.

S&P 500 futures are up about 0.3 percent, while most European indexes are posting slightly larger gains. Asian markets were mixed to lower overnight after yesterday's selloff in the United States.

The 1.4 percent pullback brought the S&P 500 down to its 50-day moving average for the first time this year and occurred just one week after the index touched a new all-time high above 1590. In addition to normal profit-taking, the selling has resulted from worries about slow growth in China and a mediocre start to the first-quarter earnings season.

Today's calendar returns attention to the broader economy, with initial jobless claims scheduled for 8:30 a.m. ET and the Philadelphia Federal Reserve's regional economic index at 10 a.m. ET. The main theme so far this earnings season appears to be weak revenue, something seen in the results of Verizon Communications, Intel, American Express, eBay, and PepsiCo.

Some technicians may also worry about slowing momentum in the broader market because the recent highs in the S&P 500 and Dow Jones Industrial Average occurred at the same time the Dow Jones Transportation Average and Russell 2000 small-cap index remained below earlier peaks. Transports and small caps had led the gains through mid-March.

Commodities are rallying after sharp drops in the last week. Oil is gaining some 1.4 percent, and precious metals are up 1 percent. Agricultural products are inching higher as well, but copper is down almost 1 percent.

Currencies are following a bullish pattern as well, along with the euro, Australian dollar and Canadian dollar all higher. The Japanese yen, which tends to move in the opposite direction as stocks and commodities, is down across the board.

In company-specific news, AXP's quarterly revenue totaled just $7.88 billion, well below the $8.03 billion consensus estimate, amid weak consumer spending. VZ missed estimates by a narrower margin. Morgan Stanley's top and bottom lines both beat forecasts thanks to growth in its wealth-management business. PEP is up about 1 percent after its earnings beat, but revenue was also light.


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