US Stocks Open Higher After Shaky Start to the Week – Wall Street Journal

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U.S. stocks showed tentative signs of stabilizing Tuesday following another turbulent session on Wall Street.

The Dow Jones Industrial Average rose 101 points, or 0.4%, to 24544, shortly after the opening bell. The S&P 500 climbed 0.4%, a day after shedding 0.7%. The index is teetering on the brink of correction territory, having tumbled 9.9% through Monday’s close from its recent peak. The technology-heavy

Nasdaq
Co

mposite added 0.2%.

Corporate earnings continued to dominate the headlines. With results in from 277 of the companies in the S&P 500, profits are expected to increase 23% a year earlier, according to FactSet. That’s one of the best growth rates this decade but has done little to stabilize stock markets during a rocky October.

Shares of

General Electric


GE -3.58%

fell 5.6% after the company said federal regulators had opened a criminal probe of its accounting practices. The conglomerate also cut its quarterly dividend to 1 cent a share and said it planned to split up its power unit.

Dow component

Pfizer


PFE -0.67%

dropped 3% after the drugmaker narrowed its revenue and profit targets for the year.

Coca-Cola

shares rose 0.5% after the beverage company reported stronger-than-expected revenue in its latest quarter, boosted by demand for sparkling soft drinks and diet sodas.

Technology stocks are in focus. Analysts will turn their attention later Tuesday to the next batch of earnings, including

Facebook

after the market close. The recent turbulence has come despite U.S. companies hitting quarterly earnings expectations at the highest rate since 2011.

Apple
,

which is scheduled to report earnings Thursday, is holding an event Tuesday to unveil new versions of its gadgets. The technology behemoth is expected to show off new members in its iPad and Mac product lines.

Stocks markets have whipsawed in recent weeks, with investors focusing on earnings and the health of the global economy. U.S. stocks initially headed higher Monday only to slide going into the close in another volatile session. The S&P 500 is on track for its worst month since February 2009, when U.S. markets were still reeling from the global financial crisis.

At the forefront of the recent index losses are the very companies that led the market rally earlier in the year: technology companies. Amazon.com fell into bear-market territory Monday—commonly defined as a 20% decline from a recent peak—erasing $127 billion from its market value in the space of two sessions. That came after Amazon reported record quarterly profits last week, but revenue that fell short of analyst expectations. Shares of Amazon slipped 2% Tuesday.

Technology stocks “were priced beyond perfection,” said Ollie Brennan, a senior macro strategist at T.S. Lombard.

Mr. Brennan said the losses in the tech sector represent a healthy adjustment of expectations, even if the size and duration of the recent market decline have been surprising.

“The selloff was warranted in the bigger picture,” said Mr. Brennan. “There’s still impetus for equities to rise. But it’s not going to be a 15% per year rise.”

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More broadly, investors are struggling to put a firm value on companies amid concerns over the impact of trade tensions, rising interest rates, the fading tailwind of corporate tax cuts and broader questions over the duration of the second-longest economic cycle in U.S. history.

“We’re nine-and-a-half years into the economic cycle. You’ve got to feel we’re fairly long in the tooth,” said Simon Derrick, chief currency strategist at BNY Mellon, adding he thinks global growth will peak in 2019.

Elsewhere, the Stoxx Europe 600 lost 0.6%. The pan-European index missed the late-reversal in U.S. stocks Monday, notching a rise of 0.9% to start the week.

A trader on the New York Stock Exchange. Facebook releases earnings later Tuesday.


Photo:

Richard Drew/Associated Press

Most markets in the Asia-Pacific region were higher. Japan’s Nikkei Stock Average rose 1.5%, China’s Shanghai Composite Index climbed 1% and Australia’s S&P/ASX 200 gained 1.3%. Hong Kong’s Hang Seng Index bucked the trend, falling 0.9%.

Write to Christopher Whittall at christopher.whittall@wsj.com