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Stocks rebound ahead of earnings

David Russell (david.russell@optionmonster.com)

Stocks are rebounding as investors prepare for corporate earnings later this week.

S&P 500 futures are up half a percent, while most of Europe is higher by more than 1 percent. Asia was mixed overnight. Recent price trends in commodities continue, with oil sharply lower and precious metals inching higher once again.

The S&P 500 is in the middle of its recent range after bouncing at key support earlier in the month, and it has traded on either side of 2000 since the summer. Attention now turns to a busy calendar, starting with quarterly results from Alcoa this afternoon.

Retail sales follow tomorrow morning, then earnings from CSX after Tuesday's closing bell. JP Morgan Chase and Wells Fargo get the ball rolling for financials Wednesday morning.

Retailers have been strong for months as investors respond to strong hiring and consumption patterns in the United States. optionMONSTER's proprietary researchLAB market scanner now shows homebuilders and related companies following the same trend. Gold and silver miners have stood out the most investors find value in a group that's lagged the broader market for years.

Several retailers are active on results today, and there are at least three deals in the pharmaceutical space. Lululemon Athletica rose 4 percent after raising its outlook for the current quarter. Tiffany dropped 6 percent on lowered guidance. Express said that earnings will surpass previous estimates thanks to a late rebound in business, which drove the shares higher by 9 percent.

Foundation Medicine more than doubled after Roche bought more than half the company, and NPS Pharmaceuticals gained almost 9 percent on a takeover by Shire. Tekmira Pharmaceuticals surged 47 percent after buying closely held Oncore Biopharma.

Oil remains the big mover in commodity markets, dropping more than 2 percent amid ongoing supply gluts. Gold and silver rose about 0.4 percent, but copper is down 0.7 percent. A strong U.S. dollar remains the dominant story in foreign-exchange markets as the greenback pushes higher against the Japanese yen, euro and Australian dollar.

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