U.S. stocks turned higher Tuesday afternoon, with the Nasdaq making its largest rebound in five years, as investors weighed upbeat earnings from Dow components Coca-Cola and Johnson & Johnson against disappointing reads on builder sentiment and New York-area manufacturing, while tracking events in Ukraine.
Reports of pro-Russian separatists briefly taking control of an airfield in eastern Ukraine weighed on investor sentiment early on, but the mood shifted Tuesday afternoon, when investors were heartened that "the worst case scenario hasn't come to fruition," said Art Hogan, chief market strategist at Wunderlich Securities.
"They are both talking themselves into a conflict, but things didn't get worse and that's exactly where we are now," Hogan said.
The market's latest reversal happened to come in roughly the same time frame as a story Tuesday afternoon that Japan planned to downgrade its economic assessment. "It's hard to pinpoint on any one headline," said Dan Greenhaus, chief global strategist at BTIG. But the idea that the "Bank of Japan could do a little more support took the yen down and coincided with a turn in equities," he added.
That said, "people are grasping at a lot of things right now; people will grasp at anything for signs of life. At some point some of these hard-hit names and sectors are going to get attractive, if valuation is your concern, but it's on a case-by-case, or sector-by-sector basis," Greenhaus said.
"The market is very oversold here, it should rally," said Bruce Bittles, chief investment strategist at RW Baird.
"The market is trading more on technical levels as opposed to fundamentals, but ultimately the fundamentals will trump everything, as that's the environment you can project for corporate profits, and corporate profits are going to matter more this year than multiple expansion," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.