By Wallace Witkowski and Victor Reklaitis, MarketWatch
SAN FRANCISCO (MarketWatch) -- U.S. stocks closed higher Tuesday
following a choppy session, bouncing back from a sizable drop that
came after reports of fighting on the ground in Ukraine.
The main indexes advanced for a second straight day and finished
a little under their morning highs, which came as blue chips
Coca-Cola Co. and Johnson & Johnson Inc. boosted sentiment with
upbeat earnings reports.
The S&P 500 (SPX) rose 12.37, or 0.7%, to end at 1842.98,
with energy and utilities faring best among the index's 10 sectors.
The benchmark pared its year-to-date loss to 0.3%.
The Dow Jones Industrial Average (DJI) gained 89.32, or 0.6%, to
close at 16,262.56. The blue-chip index had been down by as much as
110 points at midday, and it also was up by 99.71 points at its
session peak, according to FactSet data.
The Nasdaq Composite (RIXF) tacked on 11.47, or 0.3%, to finish
at 4,034.16. Earlier, the Nasdaq fell to an intraday low of
3,946.03, about 12 points shy of being down 10% from its recent
intraday high on March 6 -- in other words, correction territory.
(Read more: Nasdaq flirts with correction territory
http://blogs.marketwatch.com/thetell/2014/04/15/chart-nasdaq-composite-flirts-with-correction-territory/.)
Stocks rose early on the earnings reports from Coca-Cola Co. and
Johnson & Johnson Inc. Their big tumble came following reports
that Russian forces had been spotted in the Ukraine and that
Ukrainian forces stormed an airport in Kramatorsk held by
pro-Russian militants. Ukrainian forces reportedly secured the
airport. The White House said pro-Russian militants are provoking
Ukrainian forces into a confrontation.
"In my view, the Russian headlines were the cause for the
decline," said Dan Greenhaus, chief global strategist at BTIG.
Equities started pulling back from earlier session highs after a
lower-than-anticipated reading for a gauge of home-builder
confidence. Also weighing on sentiment was an unexpected decline in
the Empire State manufacturing index.
Tuesday's big swings are pretty much in line with the volatility
stocks have seen over the past few weeks said Paul Nolte, portfolio
manager at Kingsview Asset Management.
"We've seen big swings and that's more a sign of investor
indecision about anything and everything," Nolte said. "We're still
trying to piece together what the investing landscape will be in
three months."
The market's choppy action and slight year-to-date loss isn't
surprising after 2013's big advance, said Jim Kee, president and
chief economist at South Texas Money Management. Kee said the firm
has been telling clients to expect one or more pullbacks or
corrections this year, but ultimately a gain by the end of the
year.
"It's kind of typical following a year like we had last year,"
he said of the market's slumps in 2014. Kee said the U.S. economy
is normalizing, and he remains bullish. "We've been telling our
clients that a pullback or a correction is a good time to put money
to work," he said.
Among chart watchers, some see further pain in at least the near
term for the S&P 500.
Jonathan Krinsky, chief market technician at MKM Partners, wrote
in a note Tuesday that he expects the benchmark to slip to its
200-day moving average, which is currently around the 1,763 level.
He's "looking for the SPX to test the 200 DMA in the next week or
so," he wrote.
Builder confidence in the market for newly built, single-family
homes edged up slightly in April to a reading of 47 from 46 in
March, but that missed forecasts for 50.
In other U.S. economic news, the New York Federal Reserve said
its Empire State manufacturing index slipped to 1.3 in April from
5.6 in March, missing forecasts for a gain to 8. In addition, the
Labor Department said U.S. consumer prices rose 0.2%, slightly
above what economists expected for that inflation gauge.
On the earnings front, Dow component Coca-Cola (KO) reported
growth in key emerging markets as first-quarter revenue beat
forecasts. Shares gained 3.7% to lead the Dow.
Johnson & Johnson (JNJ) advanced 2.1% after the Dow
component reported quarterly earnings that beat forecasts and
raised its full-year profit guidance. J&J was the second-best
performer in the blue-chip index.
Among other notable movers on Tuesday, Citigroup Inc. (C)
advanced 1.3%, building on a gain from Monday, when the bank
reported first-quarter results above Wall Street forecasts.
Charles Schwab Corp.(SCHW) rose 3.2% after posting quarterly
profit that topped expectations before the open.
Shares of Motorola Solutions Inc. (MSI) dipped 0.6%, giving up
an earlier gain that came following the company's deal to sell its
enterprise business to Zebra Technologies Corp. (ZBRA) for $3.45
billion in cash. Zebra shares triggered a Nasdaq short-sale circuit
breaker after falling more than 10%.
The iShares Nasdaq Biotech ETF (IBB), which has been a poster
child for the recent tech-led selloff in U.S. stocks, closed up 1%
after spending most of the day in the red. (Read more: Biotech ETFs
can't make up their minds
http://blogs.marketwatch.com/health-exchange/2014/04/15/biotechs-game-of-limbo-continues-as-street-wonders-how-low-it-can-go/.)
In other financial markets on Tuesday, bourses closed mixed in
Asia, with Hong Kong and Shanghai taking a hit from China's latest
credit data. European stocks lost ground as investors worried about
the Ukraine crisis. Oil (CLK4) and metals(GCM4) declined, pushed
lower by a stronger dollar.
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