By Chris Dieterich
U.S. stocks rose on Tuesday as markets stabilized after three
straight days of deep declines.
Corporate earnings were in focus after quarterly reports from
blue chips J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo
& Co. and Johnson & Johnson.
The Dow Jones Industrial Average rose 102 points, or 0.6%, to
16423 in early trading. The S&P 500 added 14 points, or 0.8%,
to 1889, while the Nasdaq Composite Index rose 45 points, or 1.1%,
to 4259.
Yields on benchmark 10-year Treasury notes fell to 2.215%, from
2.305% late on Friday. U.S. bond markets were closed on Monday for
Columbus Day. Bond yields fall when prices rise.
Uncertainty about the pace of global economic growth and changes
to the Federal Reserve's easy-money policies have combined to force
stocks suddenly and sharply lower in recent weeks. The Dow
industrials slumped 223 points on Monday for their ninth decline
over the past 11 trading days.
The S&P 500 finished Monday down 6.8% since closing at an
all-time high on Sept. 18, its steepest pullback since late 2012,
when investors wrestled with the implications of the so-called
fiscal cliff and political stalemate in Washington, D.C.
Another move lower on Tuesday would give the S&P 500 its
first four-session streak of declines this year.
"The damage is becoming too hard to ignore," said Mike O'Rourke,
chief market strategist at JonesTrading Institutional Services,
noting that he anticipates that some investors are likely to move
chunks of their stock allocation to cash in the months ahead rather
than weather more choppy trading.
European equity markets fell after Germany's closely watched ZEW
survey showed a sharp drop in economic sentiment. The Stoxx Europe
600 declined 0.2%, paring losses of as much as 1.4% earlier. German
government bonds surged to their strongest level on record.
J.P. Morgan Chase swung to a third-quarter profit, but narrowly
missed analyst estimates, as legal expenses overshadowed gains in
fixed-income trading revenue. J.P. Morgan benefited from stronger
investment banking fees, but saw a slump in debt capital markets.
Shares declined 1.4%.
Citigroup said its quarterly profit rose 6.6% from a year
earlier, topping analyst estimates, helped by
stronger-than-expected trading revenues. The firm set plans to
further retreat from some foreign retail-banking markets. Shares
rose 2.7%.
Wells Fargo's quarterly profit met Wall Street's profit
expectations, though results showed a continued slowdown in the
bank's mortgage business. Shares declined 1.8%
Johnson & Johnson rose 1.4% after the health-care products
company said its quarterly earnings rose 59% on higher
pharmaceutical sales. The company's report is considered a
bellwether since the maker of Band-Aids and Listerine mouthwash is
involved in so many business lines.
Oil prices continued to spiral lower. U.S. crude futures
declined 1.1% to $84.81. Increased production in the U.S. has
helped contribute to a glut of global oil supply at a time when
demand for petroleum products, notably in Europe, is ebbing.
Falling oil prices continued to hit shares of energy companies,
with that segment of the S&P 500 dropping 12% over the past
month. Energy stocks rebounded on Tuesday, however, as one of the
market's leaders.
Shares of travel and airline stocks also rebounded after taking
a hit on concerns about the spread of the Ebola virus. United
Continental Holdings Inc. and Delta Air Lines Inc. rose Tuesday
after sinking 7.3% and 6.1% on Monday, respectively.
In Asia, Japan's Nikkei fell 2.4%, while Hong Kong's Hang Seng
index declined 0.4%. The dollar rose against the euro and yen.
Gold futures added 0.3% to $1,233.70 an ounce.
Write to Chris Dieterich at chris.dieterich@wsj.com