The Standard & Poor's 500 fell nearly 3 percent over the previous
two sessions, including Monday's slide, which was the worst drop for
the benchmark index since June. The selloffs were triggered by
weaker-than-expected U.S. data, as well as concerns over growth in
China and the outlook for some emerging economies.
The drop proved enticing for investors looking for bargains as
emerging market concerns retreated and their currencies moved off
recent lows. The S&P's consumer discretionary <.SPLRCD> and
financial <.SPSY> stocks were among the best-performing sector
Investors have focused on macroeconomic data in the wake of a rout
in emerging market currencies, which triggered rate hikes by some
central banks. That pressured stocks and bonds and forced investors
to favor assets perceived as relatively safe, like the yen, U.S.
Treasuries and German government debt.
"Everything that was sort of getting beaten up is bouncing. It will
be interesting to see what happens if the currencies trade back down
and what our market thinks of that," said Stephen Massocca, managing
director at Wedbush Equity Management LLC in San Francisco.
"There might be some more wood to chop here, I'm not one hundred
percent sold on this."
The price of protection against further declines in the S&P 500 slid
10.9 percent after jumping on Monday to its highest level in 13
months. The CBOE Volatility Index <.VIX>, known as Wall Street's
fear barometer, closed on Tuesday at 19.11.
Data on Tuesday showed new orders for U.S. factory goods fell in
December, but rose for a third straight month when the volatile
transportation sector was excluded.
The Dow Jones industrial average <.DJI> rose 72.44 points or 0.47
percent, to end at 15,445.24. The S&P 500 <.SPX> gained 13.31 points
or 0.76 percent, to finish at 1,755.20. The Nasdaq Composite <.IXIC>
added 34.562 points or 0.86 percent, to close at 4,031.52.
Of the 277 companies in the S&P 500 that have reported earnings so
far this season, 69.3 percent have beaten analysts' profit
expectations, while 65.2 percent have exceeded revenue expectations,
according to the latest data from Thomson Reuters.
Pfizer <PFE.N> was among the S&P 500's leaders with a 2.8 percent
gain to $31.44 after Jefferies upgraded the largest U.S. drugmaker's
stock to a "buy" from a "hold" rating.
Michael Kors Holdings Ltd <KORS.N> reported a 77 percent jump in
third-quarter profit as shoppers snapped up its handbags and
accessories, pushing the company's shares up 17.3 percent to $89.91.
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Bank shares were underpinned by U.S-traded shares of UBS <UBS.N> and
Itaú Unibanco <ITUB.N>, which rallied. Itaú, Brazil's largest
private-sector lender, reported record fourth-quarter profit that
beat analysts' estimates. UBS swung to a larger-than-expected
fourth-quarter profit and announced higher dividends and bonuses.
Itaú ADRs shot up 7.6 percent to $12.96. UBS added 5.9 percent to
J.C. Penney Co Inc shares <JCP.N> dropped 10.6 percent to $5.08,
reversing a steep gain in pre-market trading. The U.S. department
store chain reported a modest rise in quarterly comparable sales,
but gave no details on its gross profit margin, leading analysts to
conclude it had to resort to bigger discounts during the holiday
season. JPMorgan and Sterne Agee cut the target price of the stock — JPMorgan to $5 from $6 and Sterne Agee to $3 from $9.
Shares of Yum Brands Inc <YUM.N> rose 8.9 percent to $72.06 after
the KFC parent reaffirmed its 2014 profit outlook and said a
resurgent bird flu in China had not hurt national sales in its top
Furiex Pharmaceuticals <FURX.O> shares more than doubled in price.
The drugmaker said an experimental drug met the main goal of a pair
of large clinical trials by significantly alleviating diarrhea and
abdominal pain associated with irritable bowel syndrome. Shares
soared 129.9 percent to end at $105.69.
Volume was active, with about 7.41 billion shares traded on U.S.
exchanges, above the 6.94 billion average in January, according to
data from BATS Global Markets.
Advancing stocks outnumbered declining ones on the NYSE by a ratio
of 2 to 1. On the Nasdaq, nearly two stocks rose for every one that
(Editing by Jan Paschal)
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