NEW YORK (AP) — Investors’ jitters over emerging markets faded on Tuesday and U.S. stocks rose for the
first time in four days.
Global
stock markets stabilized after three turbulent days when investors grew
worried about growth in China and other developing economies. The
sell-off began last Thursday, when a survey for January showed that
Chinese manufacturing was set to contract, dragging down stocks in Asia,
Europe and the U.S. The slide continued on Friday as currencies in
countries including Argentina and Turkey slumped. On Monday, Asian
markets dropped, although the selling on Wall Street eased.
By
Tuesday, though, global markets regained their calm. In the U.S.,
earnings gains from big companies, including Pfizer, Comcast and D.R.
Horton helped lift stock indexes. One area of disappointment, though,
was Apple, whose weak revenue forecast pushed its stock to the biggest
one-day loss in a year.
The stock market has fallen 3 percent in
January. In 2013 the market rose 5 percent in the first month, on its
way to a 30 percent rise for the year, climbing to record levels.
While
the market has not had a correction, a drop of 10 percent or more,
since October 2011, many believe that the rally has yet to run its
course.
"I tend to interpret the choppiness and downward movement
in share prices so far this year as just a little bit of a stumble off
the starting block," said John Carey, a portfolio manager at Pioneer
Investments. "This is a temporary situation."
The Standard &
Poor’s 500 index rose 10.94 points, or 0.6 percent, to 1,792.50. The Dow
Jones industrial average gained 90.68 points, or 0.6 percent, to
15,928.56. The Nasdaq composite climbed 14.35 points, or 0.4 percent, to
4,097.96.
Nine of the 10 sectors that make up the S&P 500
index rose. Health care and financial stocks were the two
best-performing sectors. The technology sector was the only one to fall.
Apple
slumped $44, or 8 percent, to $506.50 after the company’s first-quarter
results released late Monday disappointed investors. First-quarter
shipments of iPhones were below expectations, reinforcing perceptions
that Apple is now mostly selling its mobile devices to repeat customers
who are upgrading, instead of reeling in new customers. Apple also
provided a cautious second-quarter revenue forecast.
A key reason
that financial markets stabilized on Tuesday was the widespread
expectation that Turkey’s central bank would raise interest rates later
that day. The higher rates would shore up Turkey’s slumping currency and
fight inflation.
After U.S. markets closed, Turkey’s central bank
announced a sharp increase in its benchmark interest rate, to 12
percent from 7.75 percent. Relieved investors sent the Turkish currency,
the lira, surging against the dollar. The lira’s plunge last week was
at the center of an emerging-market slump that prompted the global
sell-off in stocks.
The Argentine peso also stabilized Tuesday
after a big drop on Friday when the government was forced to relax
restrictions on the purchase of U.S. dollars. The peso dropped 0.3
percent to 8.02 per dollar on Tuesday.
Investors will once again focus on earnings Wednesday.
Fourth-quarter
results at major U.S. companies are projected to rise by 6.3 percent
from the same period a year earlier. Of companies that have reported
results, about two-thirds have met or beaten expectations, according to
S&P Capital IQ.
After signs of accelerating economic growth in
the fourth quarter, some investors are disappointed that companies
aren’t seeing stronger demand.
"People were hoping, generally, for
better earnings," said David Lafferty, chief market strategist for
Natixis Global Asset Management. "We’ve sort of met expectations, but we
haven’t significantly exceeded them."
Investors will also be focusing on the Federal Reserve.
Most
analysts expect that the Fed will announce that it will further reduce
its bond purchases by $10 billion to $65 billion following a two-day
meeting that began Tuesday. The central bank has been buying bonds to
hold down long-term interest rates and encourage lending and hiring. The
policy also helped power a rally last year, when the S&P 500 index
had its biggest annual gain since 1997.
In government bond trading, the yield on the 10-year Treasury note held steady at 2.75 percent.
In
commodities trading, the price of oil rose $1.69, or 1.8 percent, to
$97.41 a barrel. Gold fell $12.60, or 1 percent, to $1,251.80 an ounce.
Among stocks making big moves:
—
Homebuilder D.R. Horton was the biggest gainer in the S&P 500
index, surging $2.06, or 9.8 percent, to $23. The stock gained after
Horton reported that its fiscal first-quarter net income jumped 86
percent as selling prices for its houses rose. Other house builders
including PutleGroup and Lennar also rose.
— Pfizer gained 76
cents, or 2.6 percent, to $30.42 after the company’s earnings beat
analyst expectations, helped by lower costs.
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