Dow Recovers to Positive Territory Following Mid-Session Tumble

NEW YORK (TheStreet) -- U.S. stock indices recovered gains following midday losses.

Benchmark indices were on a firmer trajectory earlier Tuesday after solid earnings from companies such as Coca-Cola (KO), which had offset concern around a slowdown in Chinese economic growth.

Bank of Japan Governor Haruhiko Kuroda assured Prime Minister Shinzo Abe on Tuesday that the central bank would take additional easing measures if an economic downturn made it hard for the BOJ to achieve its inflation target.

The Dow Jones Industrial Average gained 0.55% to 16,262.56, while the S&P 500 was up 0.58% to 1,842.98. The Nasdaq lifted 0.29% to 4,034.16.

  • The National Association of Home Builders Housing Market Index for April came in at 47 vs. the average economist's estimate of 49. The Consumer Price Index in the U.S. rose 0.2% in March, beating expectations for a 0.1% result.
  • Best Buy (BBY) was one of the biggest losers in the S&P 500, shedding 2.7% as the Minneapolis Star Tribune reported that its president of U.S. retail stores, Shawn Score, is retiring. Shares were sinking in sympathy with peer hhgregg  (HGG), down more than 9% after the company gave weak fourth fiscal-quarter estimates.
  • RadioShack (RSH) was behind by 9.6% after the hhgregg news. Walmart (WMT) was down 0.65% after being downgraded to "underperform" from "market perform" at William Blair.
  • Coca-Cola was rising 3.7% after its global sales climbed 2% for the first quarter. Johnson & Johnson (JNJ) added 2.1% after it said first-quarter profit rose 34%. It raised its 2014 earnings forecasts to between $5.80 to $5.90 a share, from $5.75 to $5.85 a share.
  • Murphy Oil (MUR) increased 2.8% amid reports that the company is being approached by Japanese energy firms interested in buying Murphy's Malaysia assets.
  • Charles Schwab (SCHW) was another top gainer in the S&P 500, up 3.2% after reporting better-than-expected first-quarter results.
  • In international markets, the Hang Seng closed down 1.60% while the Nikkei added 0.62%. Data showed China's money supply grew below expectations while a measure of credit dropped 19% from a year earlier in March. Economic growth for the world's second largest economy tomorrow is forecast to have slowed to 1.5% in the first quarter.
  • In Europe, a military operation to take back control of cities in eastern Ukraine from pro-Russian militants has begun, an operation Ukraine's acting president described as "phased, responsible and balanced." President Obama has told Russian president Vladimir Putin a diplomatic solution can still be found to the crisis, with the European Union reluctant to impose further sanctions on Russia that could threaten its economic recovery. Ukraine's central bank hiked its interest rate to 9.5% from 6.5% on Monday, citing risks to price stability -- the CPI jumped from 1.2% in February to 3.4% in March.
  • Germany's DAX was closed 1.77% lower as German investor confidence fell for a fourth month during April while the FTSE in the U.K. was 0.64% lower. Inflation in the U.K. slowed to its lowest annual rate in more than four years during March, supporting the Bank of England's decision to keep rates low. Annual inflation was 1.6% in March against 1.7% in February, the lowest rate since October 2009.
  • Gina Martin Adams, senior institutional equity strategist at Wells Fargo, said in a client note that 2014 equity markets will likely be characterized by a series of fits and starts, with stock prices ultimately little changed by year-end. She expects first-quarter earnings season to have a strong hand in either halting or amplifying the latest fit. "Investors should throw out the 'beat ratio' and focus on guidance to drive stock prices over the next few weeks," said Adams. She's focusing in particular on capital spending-sensitive sectors, especially tech and industrials, as the most likely candidates to pick up earnings momentum where consumer sensitive sectors, namely financials and discretionary, are "clearly faltering."
  • Other shares expected to see price action Tuesday include Yahoo! (YHOO) and Intel (INTC). Intel is slated to post first-quarter earnings of 37 cents a share while Yahoo! is expected is likely to report earnings of 37 cents a share. CSX (CSX) is also due to report.

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