Stocks pare gains

Wall Street is still in rebound mode, but the bounce isn’t quite as high or as convincing as it looked earlier in the session.

With under half an hour to the close on Wall Street the Dow had gained 0.35% or 54 points, after being up more than 100 points at one point earlier in the day. The S&P 500, which is more representative of the US stock market as a whole because of its greater breadth, fared a little better though, rising 0.74% or 13 points to 1754.8.

Yum Brands, which includes KFC, Taco Bell and Pizza Hut amongst its fast-food brads, was a notable riser, gaining 8.8% after reporting earnings that surpassed expectations for its fourth quarter. Michael Kors was another company beating quarterly earnings forecasts, and also raised its forward guidance for earnings, resulting in a 17.8% surge in its share price.

Despite a few bumps with this week’s soft manufacturing data, I haven’t yet seen anything to dissuade me from the view that the macro picture of recovery is still in place. We’ll have plenty more evidence to pore over as the week goes on: tomorrow we have the ISM non-manufacturing index for January, offering a pointer on how the services industry is faring, and the ADP employment report could contain some insight into how Friday’s hugely important government employment report might look. 

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