By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market rose modestly on
Tuesday after a drop in factory orders during December was smaller
than economists had expected.
The main indexes rebounded from their worst declines since June
a day earlier, which were sparked by disappointing manufacturing
data that stoked fears over a possible slowdown in the economy.
Tuesday, orders for goods produced in U.S. factories fell by
less than economists expected, led by a drop for durable goods.
The S&P 500 (SPX) was 11 points, or 0.7%, higher at
1,753.16, recovering somewhat after Monday's steep selloff left the
index more than 5% below its peak, reached on Jan 15. The Dow Jones
Industrial Average (DJI) rose 50 points, or 0.3% to 15,448.22,
after dipping briefly into red early Tuesday.
The Nasdaq Composite (RIXF) rose 32 points, or 0.8% to 4,026.24
at the open.
Follow our stock market live blog.
"A 3.5% drop in one month is not something to worry about. Since
2009, we had one monthly loss for every three gains, said Frank
Fantozzi, president and founder of Planned Financial Services.
"We advise our clients to allocate more money to emerging
markets, which look cheap at the moment and to U.S. stocks, as we
believe the big macro picture remains intact," he added.
The economic calendar will get busier later in the week, with
the ISM services index and ADP jobs reports due on Wednesday, and
the closely watched nonfarm-payrolls report due on Friday.
In earnings news, Sirius XM Holdings Inc. (SIRI) fell 1.3% after
the broadcasting firm posted a drop in fourth-quarter profit.
Michael Kors (KORS) shares soared 17.7% after the firm reported
stronger-than-expected third-quarter earnings and raised its
per-share earnings guidance.
Shares of Microsoft Corp. (MSFT) pared earlier gains after news
that the software giant had named Satya Nadella, head of the
company's cloud and enterprise business, as its new chief executive
officer.
J.C. Penney (JCP) reported a 2% increase in same-store sales for
the fourth quarter, marking the first time since the second quarter
of 2011 that the retailer has generated a positive quarterly sales
result. Shares rose initially, but then tanked 11.1%.
Yum Brands Inc. (YUM) rallied 8.2% after the parent company of
KFC, Taco Bell and Pizza Hut said late Monday its fourth-quarter
earnings fell. However, the company's adjusted earnings per share
were better than projected in a FactSet survey.
CME Group Inc. (CME) shares rose slightly after the exchange
operator posted fourth-quarter earnings that were below
expectations.
Archer Daniels Midland Co.'s (ADM) fourth-quarter adjusted
earnings beat expectations. Shares gave up earlier gains and were
1.1% lower.
Markets did not react much to two Fed officials speaking on
Tuesday. Richmond Fed President Jeffrey Lacker said that he expects
tapering of the central bank's bond-buying program to continue.
Chicago Fed President Charles Evans expects the low rates to remain
well into 2015. Neither is a voting member of the Fed's policy
committee this year.
In other financial markets, European stocks finished a
third-straight day with losses, while Asian bourses closed in the
deep red. Oil rebounded ahead of inventory data, while gold moved
lower. In currencies, the Australian dollar climbed against the
U.S. dollar after the country's central bank indicated it is no
longer leaning toward cutting interest rates.
More must-reads from MarketWatch:
Hulbert: Two things Facebook must do
Kellner: What the economy needs is a weaker dollar
How wealth changes your personality
Subscribe to WSJ: http://online.wsj.com?mod=djnwires