Stocks try for rebound after Monday's gut-wrenching reversal – MarketWatch

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Stocks moved higher following the opening bell Tuesday, a day after the Dow Jones Industrial Average staged an ugly reversal to end the session with a triple-digit loss, partly on the back of tariff worries. Comments President Donald Trump made during a late-Monday interview gave investors some hope that the president is ready to make a deal to ease trade tensions with China.

However, fears about global growth and peak earnings continued to persist.

How did major benchmarks fare?

The Dow Jones Industrial Average DJIA, +0.80%   was up 150 points, or 0.6%, at 24,595.92, the S&P 500 index gained about 10 points at 2652, a rise of 0.4%. The Nasdaq Composite Index NQZ8, +0.56% was up 32 points, or 0.5% at 7087.

On Monday, the Dow DJIA, +0.80%  shed 245.39 points, or 1%, to close at 24,442.92. At its session low, it was down 566 points, and was up as much as 352 points at its intraday peak. The S&P 500 index SPX, +0.45% slid 17.44 points, or 0.7%, to 2,641.25 and the Nasdaq Composite Index COMP, +0.42%  dropped 116.92 points, or 1.6%, to 7,050.29.

Monday’s reversal added to the market’s October woes, as the Dow is down 7% month-to-date, the S&P 500 has fallen 8.9%, while the Nasdaq is 12% in the red for the month.

What is driving the market?

Stocks have entered a decidedly more volatile phase of trade, fueled by myriad concerns, with doubts about the health of the global economy chief among them.

Moreover, shares of companies that have done the most to help drive the U.S. stock market to repeated highs have come off the rails. So-called FAANG names, the acronym referring to technology and internet-related giants Facebook Inc. FB, -0.05% Amazon.com Inc. AMZN, -1.64% Apple Inc. AAPL, +0.20% Netflix Inc. NFLX, -0.76% and Google-parent Alphabet Inc. GOOGL, +0.05%  were all trading sharply lower for October. Amazon.com Inc., on Monday, fell into bear-market territory, wiping out about $120 billion in market value.

The tech-heavy Nasdaq is in correction territory, defined as a drop of at least 10% from a recent peak, while the Dow and S&P 500 are both flirting with tumbling into correction for the second time in 2018.

The market may take a modicum of relief from Trump’s late-Monday comments during a Fox News interview, but the president didn’t appear to suggest that any deal was imminent. During a Monday interview with Laura Ingraham of Fox News, where he said that the U.S. “will make a great deal with China and it has to be great, because they’ve drained our country.”

Stock losses on Monday accelerated after a Bloomberg report indicated that White House is prepared to announce tariffs on remaining Chinese imports if talks next month between Trump and Xi Jinping don’t yield results.

Markets were also digesting a raft of quarterly corporate results. About 430 companies are slated to report results on Tuesday, according to FactSet data.

What stocks were in focus

Shares of General Electric Co. GE, -5.68% fell 3.8% after it slashed its dividend and reported disappointing third-quarter results but announced a restructuring of its power business.

Shares of Coca-Cola Co. KO, +1.30%  rose 2% Tuesday, after the beverage and snack giant reported third-quarter earnings and revenue that topped expectations.

Pfizer Inc.’s stock PFE, -1.53% fell 0.7% in morning trade Tuesday, after the pharmaceutical giant reported third-quarter earnings that beat expectations but revenue that missed, and provided a downbeat revenue outlook.

Shares of cloud services firm Akamai Technologies, Inc. AKAM, +14.52% were up 13.1%, after the firm beat third-quarter estimates and raised its fourth-quarter guidance and full-year outlook in an earnings release Monday evening.

Under Armour, Inc. UAA, +24.02% stock was up 21% in early trade, after the company announced third-quarter earnings and revenue that beat analysts’ estimates.

Shares in Cognizant Technology Corp. CTSH, -4.44% were falling 3.6%, after the technology-services firm said its profit fell in the third-quarter, year-over-year, falling short of analysts expectations.

Masco Corp. MAS, +7.07% shares are up 6% after missing analysts profit estimates, but surpassing revenue expectations, in a Tuesday morning earnings announcement.

Shares of KLA-Tencor Corp. KLAC, +5.81%   jumped 6.8% in early trade Tuesday, following a third-quarter earnings release that beat Wall Street estimates.

Amazon AMZN, -1.64%   continued to shed market capitalization following last week’s earnings announcement, down 2.6% Tuesday, and more than 25% on the month.

Separately, Chesapeake Energy Corp. CHK, -12.72%  were down 14.8% after it announced that it would acquire WildHorse Resource Development Corp. WRD, +3.34% in a cash-and-stock deal valued at $4 billion. WildHorse share are up 1% in morning trade.

Several big-name companies are set to report earnings after the bell, including Facebook, Inc. FB, -0.05% e-Bay, Inc. EBAY, +1.92% and MGM Resorts International MGM, -0.08%

What are analysts saying?

“We are seeing an oversold technical rally before we head even lower,” Sam Stovall, chief investment strategist at CFRA predicted. “Most traders I talk to are still waiting for the capitulation shake off before they call a bottom.”

“It may sound hard to believe, but today’s positive open will be the 11th time in 22 trading days this month that equities opened the day higher,” wrote Paul Hickey, co-founder of Bespoke Market Intelligence in a note to clients. “The problem, as we all know by now, is what happens once that opening bell rings; there have only been six trading days where stocks have finished the day higher than they open. “

What data are in focus?

Home price gains are slowing, as the Case-Shiller 10-city composite index showed a 0.6% increase from last month’s reading, or a 5.5% annual increase. The 20-city composite index rose a seasonally adjusted 0.1% and was 5.5% higher compared to its level a year ago, the lowest annual increase in nearly two years.

Consumer sentiment hit an 18-year high, according to the Conference Board’s consumer confidence index, which rose to 137.9, from 135.3 in September.

The residential vacancy rate fell 0.4 percentage points from a year earlier to 7.1%, according to the Census Bureau report, which also showed that the U.S. homeownership rate was virtually unchanged at 64.4%

How are other markets trading?

Asian markets finished higher on the day, European stocks were mostly lower as the Stoxx Europe 600 SXXP, -0.37%  traded off 0.1% but the U.K. FTSE 100 UKX, -0.16% climbed 0.2%.

Oil futures CLZ8, -1.36% looked set to extend their losses. Gold prices GCZ8, -0.07% traded lower, while the U.S. dollar DXY, +0.10%  weakened.

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