By Mischa Frankl-Duval and Amber Burton 

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 51 points, or 0.2%, to 27634. The S&P 500 was up 0.2%, and the Nasdaq Composite advanced 0.8%.

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.

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 from August.

Craig Fehr, an investment strategist at Edward Jones said despite uncertainty due to the rise in Covid-19 infections he remains positive about the market's recovery heading into next year. "I think there are still more gains that can be seen in 2021. We're probably likely to see the stock market produce both volatility and returns that are a bit more consistent with historical norms," he said.

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 5.4% after the drugmaker lowered its profit guidance for 2020. Shares of Caterpillar slipped 2.8% 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," said Seema Shah, chief strategist at Principal Global Investors. 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 1%.

Shares of HSBC are up 4% 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


(END) Dow Jones Newswires

October 27, 2020 14:17 ET (18:17 GMT)

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