U.S. Stocks Trade Higher

By Saumya Vaishampayan And Tommy Stubbington 

        Global stocks bounced back Tuesday, as a relatively muted decline in Chinese shares allowed investors to focus on upbeat corporate earnings and the Federal Reserve's monetary-policy meeting.
        Tuesday's gains in the U.S. and Europe afforded traders a break from a global selloff that had dragged the Dow Jones Industrial Average to its lowest level in nearly six months. Driving the selloff were worries that the plunge in Chinese stocks that began in June was a harbinger of slower growth in the world's second-largest economy.
        The Dow and the S&P 500 both wiped out Monday's losses. The Dow climbed 185 points, or 1.1%, to 17625.
        In Europe, the Stoxx Europe 600 ended the session 1.1% higher, snapping a five-session losing streak.
        Investors are now looking ahead to Wednesday's statement from the Federal Reserve after a two-day meeting that began Tuesday, seeking clues on the timing of an interest-rate increase that some expect as early as September.
        "The only question will be the timing of the liftoff," said Aaron Clark, portfolio manager at GW&K Investment Management, which manages $25.4 billion. "The Fed wants to add some bullets back in the chamber so it can have some room to ease in a downturn."
        Major stock indexes tumbled on Monday after the Shanghai Composite Index posted its biggest single-day decline in eight years.
        The Dow has backed away from its last record high, set in mid-May. In addition to worries about China, the turmoil in Greece has prompted some investors to lower their exposure to risky assets such as stocks.
        The Shanghai Composite ended 1.7% lower on Tuesday, after falling as much as 5% during the session. Wild swings in Chinese stocks have captivated global investors in recent weeks and sparked fears about whether the deep stock declines could weigh on global growth. That the Shanghai Composite rebounded from its lows of the session reassured investors, said Mike Ryan, chief investment strategist for UBS Wealth Management Americas.
        "The concern after yesterday was would we see another rout taking place in China," said Mr. Ryan. "The deeper that decline, the more the risk it begins to spread across markets and have an effect on the real economy," he added.
        Chinese policy makers' support should also not be underestimated and moves in Chinese stocks are a poor barometer for what is happening in the country's economy, which is of far greater concern to investors, said Eric Lascelles, chief economist at RBC Global Asset Management, which has around $307 billion under management globally.
        "The Chinese government is taking truly extraordinary steps to support the market, and additional action seems likely," he said.
        The S&P 500 gained 25 points, or 1.2%, to 2093. The Nasdaq Composite was up 49 points, or 1%, to 5089.
        Energy stocks were up 3.2%, buoyed by higher oil prices, but remain down 5.8% for July.
        Crude-oil futures gained 1.1% to $47.90 a barrel, and gold futures fell 0.1% to $1,095.20 an ounce.
        Demand for haven assets waned. Treasury prices fell, pushing the 10-year yield up to 2.249% from 2.228% on Monday.
        In economic indicators, U.S. consumer confidence fell more than expected. The Conference Board, a private research group, said Tuesday that consumer confidence index fell to 90.9 in July. The index, which is at its lowest level since September, was forecast to drop to 100.0.
        U.S. home price growth continued, according to the S&P/Case-Shiller Home Price Index. The index covering the nation rose 4.4% in the 12 months ended in May, slightly higher than the 4.3% April increase. However, some investors said continuing price rises could make it harder for first-time buyers to afford homes, which could dampen home building.
        "The Case-Shiller is indicative that you are seeing housing prices increasing at almost twice the rate of inflation with wages essentially being static for the majority of the population," said James Abate, chief investment officer of Centre Funds, which has about $1 billion under management. "Outside of the major cities it doesn't look like we are going to see any sharp acceleration in home building."
        Corporate earnings also attracted attention.
        Baidu's stock declined 17%, weighing on other Internet stocks, after its projected revenue for the current quarter missed Wall Street's expectations.
        Ford Motor Co. reported a 44% jump in net income for the second quarter, as its performance in North America rebounded from a sluggish first quarter. Shares rose 2.4% as per-share earnings beat expectations.
        Pfizer Inc. lifted its outlook for the year as its new treatments continued to drive growth in the second quarter. Shares rose 2.4%.
        DuPont Co. trimmed its earnings outlook for the year as the company reported quarterly earnings. Shares slipped 1.3%.
        Austen Hufford contributed to this article.
        Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and Tommy Stubbington at tommy.stubbington@wsj.com
        (END) Dow Jones Newswires

        July 28, 2015 14:32 ET (18:32 GMT)

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