U.S. stocks mostly advanced on Tuesday, with the S&P 500 and Nasdaq Composite halting their worst three-day rout since 2011, with the energy sector slammed along with the price of oil, as investors considered earnings from banking powerhouses JPMorgan Chase, Citigroup and Wells Fargo and waiting to hear from Intel.
"Today was a transition day, it was important to show some sort of a gain after a strong start. But what you're seeing is fear about the Fed going away at the end of the month, this is a lot about trying to see true valuations of these stocks," said JJ Kinahan, chief strategist at TD Ameritrade.
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JPMorgan Chase edged lower after reporting earnings that missed and revenue that beat estimates; Citigroup rose after topping expectations on both the top and bottom lines; Wells Fargo declined after matching profit estimates and reporting revenue just above expectations. Johnson & Johnson erased gains that came after with the diversified health-care company's earnings.
"After the unrelenting selling pressure we've seen over the last few weeks, in the near term we are very oversold. It's hard to know how long a bounce from an oversold position can hold," said Art Hogan, chief market strategist at Wunderlich Securities.
"Earnings are coming in reasonably good, but the market is a forward-looking mechanism, so it is really a reaction to the outlook for fourth-quarter earnings and 2015," said Jim Russell, senior equity strategist for US Bank Wealth Management.
"We're hopeful that this is more than a technical bounce, as of the open, the S&P 500 was 6.9 percent from its high, but it feels like more than that because of the violence of the decline and the volatility associated with it," said Russell.
After ending at its highest level since June 2012 the prior day, the CBOE Volatility Index (VIX), a measure of investor uncertainty, on Tuesday fell 7.5 percent to 23.79.
"If in fact we have a deflationary global slowdown trade, it's only exacerbated by weak data out of Germany," added Hogan of a gauge of investor confidence in Germany, which fell to a two-year low in October. The German government also cut is 2014 economic-growth for the euro-zone's largest economy.
After a 142-point gain and 47-point fall, the Dow Jones Industrial Average lost 5.88 points to 16,315.19, with Johnson and Johnson leading the drop and Intel leading gains; with the semiconductor giant reporting after the close.
After a dip into red, the added 2.96 points, or 0.2 percent, to 1,877.70, with industrials the best performing and energy leading sector losses.
The Nasdaq gained 13.52 points, or 0.3 percent, to 4,227.17.
For every two shares falling, more than three rose on on the New York Stock Exchange, where 972 million shares traded. Composite volume neared 4.8 billion.
There is a "perfect storm for crude to stay at low levels and continue to trade lower," said Russell at US Bank Wealth Management, listing the strong dollar, a reduced demand outlook from Europe, China and the United States, and that "it appears that suppliers are really not cutting back."
"If you think our bond yields are low, take a gander across the pond," said Hogan of Germany's 10-year government note, currently yielding 0.795 percent.
On Monday, the S&P 500 finished below its 200-day moving average for the first time since November 2012, leaving it down 6.8 percent from its record closing high on Sept. 18.
Coming Up This Week:
8:30 a.m.: Retail sales for September
8:30 a.m.: Producer price index for September
8:30 a.m.: Empire State Index for October
10 a.m.: Business inventories for August
2 p.m.: Federal Reserve's Beige Book
8:30 a.m.: Weekly jobless claims for week ending Oct. 11
9:15 a.m.: Industrial production for September
10 a.m.: Home Builders Index for October
10 a.m.: Philly Fed
8:30 a.m.: Housing starts for September
9:55 a.m.: Consumer sentiment for October
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