By Mischa Frankl-Duval 

U.S. stocks wobbled Tuesday, attempting to stabilize after worries about the coronavirus pandemic sent markets tumbling to start the week.

The Dow Jones Industrial Average fell 50 points, or 0.2%, to 27631 shortly after the opening bell. The S&P 500 was unchanged and the Nasdaq Composite advanced 0.2%.

Rising Covid-19 infection levels around the world are compounding worries about the global economic outlook. The seven-day average of new cases in the U.S. reached an all-time high Monday, while a number of countries in Europe, including Italy, Spain and Russia, tightened restrictions on activity to try to curb the spread of the virus.

"The key thing that we're watching at the moment is going to be the Covid numbers. More importantly, how countries are responding to them," said Seema Shah, chief strategist at Principal Global Investors. "The way that governments have stopped reprioritizing opening, and gone back to lockdowns: that's what's freaking out markets."

One factor that has helped stocks bounce back from selloffs in the past: evidence that parts of the economy have started to recover from disruptions and shutdowns related to the pandemic.

Orders for long-lasting factory goods increased for the fifth consecutive month in September, Commerce Department data showed Tuesday. Orders rose 1.9% in September compared with August.

Some investors are also betting that authorities will avoid the stringent lockdown measures put in place in the spring, which brought the global economy to a jarring halt.

"At the moment, the market is discounting for further lockdowns and for the economy to suffer dramatically again, and I just don't see that," said Patrick Spencer, managing director at U.S. investment firm Baird. "We're in a V-shaped recovery."

A string of earnings results drove swings across the stock market.

Shares of Eli Lilly slipped 5.1% after the drugmaker lowered its profit guidance for 2020. The company left previous forecasts for revenue and adjusted earnings unchanged.

Shares of Caterpillar slipped 1.4% after the company reported profits and revenue fell during its most recent quarter.

Results from Microsoft, due after the closing bell, may give investors additional cues on the strength of the largest U.S. technology firms. Those companies have been responsible for much of the stock market's strength this year.

"For a lot of companies, mainly big tech, where the expectations are pretty high, we need to see them meet those expectations," Ms. Shah said. Investors are going to be particularly focused on forward-looking projections, and any sense that companies anticipate further pain in 2021 could damage sentiment, she said. "The greatest concern is going to be the guidance, because it's [the fourth quarter] that's been the real concern."

Overseas, the Stoxx Europe 600 ticked down 0.5%.

London-listed shares of HSBC jumped 5% after the bank set aside $785 million in provisions for bad loans in the September quarter, less than a third of the amount set aside in the previous three months.

In Asia, most major equity benchmarks posted tepid declines. Hong Kong's Hang Seng Index retreated 0.5% and Japan's Nikkei 225 was largely flat, while the Shanghai Composite Index ticked up 0.1%.

Write to Mischa Frankl-Duval at Mischa.Frankl-Duval@wsj.com

 

(END) Dow Jones Newswires

October 27, 2020 10:00 ET (14:00 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.