Stocks rally on earnings a day after ending at 5-month lows

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By Marley Jay, The Associated Press

U.S. stocks climbed Tuesday on another volatile day of trading as solid earnings reports from several big companies buoyed investors.

Many of the best-performing stocks came from parts of the market that have fared the worst during the market’s October plunge. Those included smaller and more U.S.-focused companies, internet and media companies, basic materials makers and energy companies.

The benchmark S&P 500 index jumped 41.38 points, or 1.6 percent, to 2,682.63, a day after closing at a five-month low. But the index is still 8.5 percent below the all-time high it set on Sept. 20. Stocks have had a few solid gains in this stretch but failed to maintain the momentum.

Corporate earnings are up about 20 percent this year, boosted by the strong U.S. economy and lower corporate taxes. Analysts expect company profits to keep growing in 2019, but at a slower pace. The stock market tends to track company profits, so the projected slowdown in growth has contributed to investors’ anxiety. There is also concern that the economy will slow from the hot pace of the last two quarters, when it grew 4.2 percent and 3.5 percent, respectively.

The S&P 500 is on track for its worst monthly performance since the current bull market started in March 2009. On Monday the benchmark index closed at its lowest level since early May following a report that the Trump administration could announce more tariffs on imports from China in December.

The Dow Jones Industrial Average gained 431.72 points, or 1.8 percent, to 24,874.64. The Nasdaq composite advanced 111.36 points, or 1.6 percent, to 7,161.65. The Russell 2000 index of smaller-company stocks rose 29.33 points, or 2 percent, to 1,506.64.

Among technology companies, chipmaker Intel rose 5.2 percent to $47.76.

General Electric cut its dividend again. The company halved its dividend to 12 cents from 24 cents in December, and cut it to 1 cent Tuesday. The struggling industrial giant also said the Justice Department has opened a criminal investigation into a $22 billion charge it booked to its power business this year. Securities regulators were also conducting a civil probe. The stock sank 8.8 percent to $10.18, its lowest price since April 2009.

Bond prices fell. The yield on the 10-year Treasury note rose to 3.12 percent from 3.08 percent.

Benchmark U.S. crude shed 1.3 percent to $66.18 per barrel in New York. Brent crude, used to price international oils, lost 1.8 percent to $75.91 per barrel in London.

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