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Stocks rise on Wall Street after 3 days of losses
New York » U.S. stocks rose for the first time in four days Tuesday following a slump caused by worries about global growth.
Emerging markets stabilized earlier as policymakers in Turkey said they would take action to stem the decline of the nation's currency. In the U.S., earnings gains from big companies, including Pfizer and Comcast, helped lift stock prices.
KEEPING SCORE: The Standard & Poor's 500 index gained 11 points, or 0.6 percent, to 1,792 as of 2:46 p.m. Eastern time. The Dow Jones industrial average rose 95 points, or 0.6 percent, to 15,932. The Nasdaq rose 11 points, or 0.3 percent, to 4,094.
STOPPING THE ROT: The Turkish lira edged higher against the dollar after that nation's central bank signaled that it was preparing to reverse course and raise interest rates to fight inflation. The currency's decline was at the center of an emerging-market slump that prompted the global sell-off in stocks last week. The lira was trading at 2.26 per dollar on Tuesday and has fallen 4 percent against the U.S. currency this year.
STEADIER WORLD STOCKS: Global financial markets stabilized Tuesday following several days of turmoil in stocks and emerging-market currencies. The FTSE 100 index of leading British shares closed up 0.3 percent at 6,572 while Germany's DAX rose 0.6 percent to 9,406. The CAC-40 in France rose 1 percent to 4,185. Asian markets were mixed. Japan's Nikkei 225 fell 0.2 percent to 14,980 and while South Korea's Kospi edged up 0.3 percent to 1,916.
THE LAST BIG THING: Apple slumped $42.04, or 7.6 percent, to $508.40 after the company's first-quarter results released late Monday disappointed investors. The stock is down 9.4 percent this year. 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.
HOUSING STOCKS: Homebuilder D.R. Horton was the biggest gainer in the S&P 500 index, surging $2.17, or 10.4 percent, to $23.12. 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.
DRUGS BEAT: Pfizer gained 94 cents, or 3.2 percent, to $30.60 after the company's earnings beat analyst expectations, helped by lower costs. Health-care stocks had some of the biggest gains of the 10 sectors in the S&P 500 index.
U.S. EARNINGS: Fourth-quarter earnings at major U.S. companies are projected to rise by 6 percent in the fourth quarter 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."
CABLE GUYS: Comcast rose 84 cents, or 1.6 percent, to $53.34. The cable company said it added 43,000 video subscribers in the fourth quarter, its first gain in six and a half years as its X1 set-top box helped it retain customers and increase revenue from video-on-demand. Comcast also said it is raising its quarterly dividend and will buy back more of its own stock.
THE FED: Most analysts expect that Federal Reserve policymakers will further reduce the central bank's bond purchases by $10 billion to $65 billion following a two-day meeting that starts Tuesday. The Fed has been buying the bonds to hold down long-term interest rates, encouraging lending and hiring. The policy also helped power a rally last year that pushed the stock market to record levels.
BUY THE DIPS: The S&P 500 index started the day down 3.6 percent for January, after climbing almost 30 percent last year. Investors should take advantage of any sell-offs to buy stocks at lower levels, said Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank.
"We've been recommending to our clients when we have these heightened periods of volatility to buy on the dips," said Mangus, who favors U.S. blue chip stocks.
BONDS AND COMMODITIES: Bond prices were little changed. The yield on the 10-year Treasury note held steady at 2.75 percent. 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.