A combination of tepid earnings results, falling oil prices and downbeat news kept the market lower for most of the day. Major indexes started higher in the first few minutes of trading but quickly faded, as slipping confidence among homebuilders and another drop in crude pulled housing and energy stocks down. The S&P 500 spent the afternoon slowly recovering, until a late surge in Apple, Netflix and other technology titans helped nudge the index up.
“There’s just a lot driving trading today,” Randy Frederick, managing director of trading and derivatives with the Schwab Center for Financial Research. “I think we’re going to see more volatility for a while, not just down but up, too.”
The S&P 500 index inched up 3.13 points, or 0.2 percent, to finish at 2,022.55.
The Dow Jones industrial average gained 3.66 points, a sliver of a percent, to 17,515.23, and the Nasdaq rose 20.46 points, or 0.4 percent, to 4,654.85.
Of the 10 sectors in the S&P 500 index, technology companies had the best day, with Apple and Netflix climbing 3 percent.
Frederick said that uncertainty is behind the recent turbulence.
At the moment, there are just too many open questions about oil prices and the global economy. He pointed to two upcoming events that could swing markets: a meeting of the European Central Bank on Thursday and elections in Greece on Sunday. Many in the markets are betting that the ECB will unveil a new effort to revive that region’s flagging economy.
U.S. economic news Tuesday offered little encouragement. A weak signal from the housing market sent builders’ stocks down. The National Association of Home Builders/Wells Fargo’s builder sentiment index slipped a point from the prior month, an indication that they feel slightly less confident in their sales prospects heading into the spring. D.R. Horton dropped 81 cents, or 3 percent, to $22.95, while PulteGroup lost 77 cents, or 4 percent, to $20.80.
The International Monetary Fund cut its forecasts for global growth over the next two years, warning that persistent weakness in most major economies will outweigh any benefit from lower oil prices. It now predicts global growth at 3.5 percent this year and 3.7 percent in 2016.
China’s government said that its economy expanded 7.4 percent last year, its weakest pace in 24 years. The slower growth is partly a result of Beijing’s efforts to wean the economy off its reliance on heavy industry and trade. But a range of problems, including a slumping property market and uneven exports, have hampered the shift.
Europe’s stock markets ended mixed. France’s CAC 40 gained 1.2 percent, while Germany’s DAX closed with a gain of 0.1 percent.
Johnson & Johnson, the maker of Tylenol, Band-Aids and baby shampoo, turned in earnings early Tuesday that beat analysts’ forecasts, yet it came up short for revenue, largely a result of a stronger dollar. Sales of medical devices and other products sank as transactions in foreign currencies translated into fewer dollars. The company’s stock fell $2.75, or 3 percent, to $101.29.
Delta Air Lines surged $3.33, or 7 percent, to $49.17, thanks to its stronger results. The recent slump in oil prices helped, as the airline spent much less on fuel at the end of last year compared with the same period of 2013.
In other trading, prices climbed in the U.S. government bond market, tamping Treasury yields down. The yield on the 10-year Treasury dipped to 1.79 percent, a sharp drop from 1.84 percent late Friday.
Most precious and industrial metals made gains. Gold continued its recent rally, climbing $17.30 to settle at $1,294.20 an ounce. Silver rose two cents to $17.96 an ounce. Copper was the exception, slipping 2 cents to $2.59 a pound.
Reports of China’s slower economic growth helped push the price of oil lower Tuesday. Benchmark U.S. crude for February delivery fell $2.30 to close at $46.39 a barrel in New York on the last day of trading for the contract. Brent crude for March delivery, the international benchmark, fell 85 cents to close at $47.99 in London.
In other trading on the NYMEX:
- Wholesale gasoline slipped 4.6 cents to close at $1.313 a gallon.
- Heating oil fell 7.5 cents to close at $1.591 a gallon.
- Natural gas lost 29.6 cents to close at $2.831 per 1,000 cubic feet.