"After this whole year of being down over 5 percent, I think the markets are trying to rally," said David Chalupnik, head of equities for Nuveen Asset Management. "I don't know if it holds through the day."
MACRO MESS: Financial markets in developing countries like Turkey and Argentina have been shaken in recent weeks by concerns that growth will slow and money will flow out of their economies as the U.S. Federal Reserve tightens its monetary policy. That has knocked down many stock markets, which were ripe for a pullback after big gains in 2013.
OVERSEAS: The Nikkei tumbled 4.2 percent to 14,008.47 and is down 14 percent over the past month. Hong Kong's Hang Seng declined 2.9 percent to 21,397.77 on its first day of trading following a 4-day weekend for the Lunar New Year. Markets in China and Taiwan remain closed. The FTSE 100 index of leading British shares eased 0.7 percent at 6,465 while Germany's DAX fell 0.6 percent to 9,127. The CAC-40 in France rose 0.2 percent to 4,117.
HOLDING BACK: While many investors were buying back into the market, overall trading was down about 50 percent from the 50-day moving average benchmark. Even so, most of the active stocks were in the green, with about three stocks rising for every one declining.
KORS ON TOP: Michael Kors surged $13.98, or 18.1 percent, to $90.55 after the fashion retailer reported third-quarter net income rose 77 percent. The company topped Wall Street expectations.
MICROSOFT MOVES: Microsoft named Satya Nadella as its new CEO. Founder Bill Gates is stepping down as chairman and will become a technology adviser to the company. Shares rose 12 cents, or 0.3 percent, to $36.60.
FINGER LICKIN' GOOD: Yum! Brands jumped $5.34, or nearly 8 percent, to $71.48. The company, which owns KFC, Pizza Hut and Taco Bell, reported better-than-expected fourth-quarter earnings late Monday. It also indicated it remains confident its earnings per share will grow 20 percent this year.
MAKING A SPLASH: Xylem was up $2.86, or 8.7 percent, to $35.66. The water technology provider reported better-than-anticipated fourth-quarter earnings.
UNPLUGGED: Nine out of the 10 sectors in the S&P 500 were posting gains. The laggard? Utilities. Dominion Resources led the sector decline. Shares slid $1.18, or 1.8 percent, to $65.94.
HAVING A BAD DAY: Business information firm The Dun & Bradstreet fell the most among stocks in the S&P 500 index. It shed $9.36, or 8.8 percent, to $97.15. Energy equipment company Helmerich & Payne also dropped, sliding $2.47, or 2.9 percent, to $83.80.
HOME SALES BOOST: U.S. homebuilders were trading higher following a report by real estate data firm CoreLogic that showed U.S. home prices climbed 11 percent in December from a year earlier. Home prices slipped from November to December, the third consecutive monthly decline. Builder NVR was leading the pack, up $29.97, or 2.6 percent, to $1,166.90.
TREASURIES: The yield on the 10-year Treasury note climbed to 2.63 percent from 2.58 percent on Monday as investors sold bonds. For most of the year, investors have bought bonds amid concern that U.S. growth is slowing after a strong fourth quarter, and because the Federal Reserve had reduced its own purchases of bonds.