By Mischa Frankl-Duval and Amber Burton
U.S. stocks wobbled Tuesday, attempting to stabilize after worries about the coronavirus pandemic sent markets tumbling to start the week.
Rising Covid-19 infection levels around the world are compounding worries about the global economic outlook. The seven-day average of new cases in the U.S. reached a record Monday, while a number of countries in Europe, including Italy, Spain and Russia, tightened restrictions on activity to try to curb the spread of the virus.
One factor that has helped stocks bounce back from selloffs in the past: evidence that parts of the economy have started to recover from disruptions and shutdowns related to the pandemic.
Orders for long-lasting factory goods increased for the fifth consecutive month in September, Commerce Department data showed Tuesday. Orders rose 1.9% in September from August.
The Dow Jones Industrial Average fell 222.19 points, or 0.8%, to 27463, down four of the past five trading days. The blue chips are down 3.8% for 2020. The S&P 500 lost 10.29 points, or 0.3%, to 3390.68. The Nasdaq Composite climbed 72.41 points, or 0.6%, to 11431.35.
Technology stocks were a relative bright spot in Tuesday's market, buoyed by Advanced Micro Devices' planned $35 billion acquisition of Xilinx, a fellow chip maker. Xilinx shares rose $9.80, or 8.6%, to $124.35. AMD fell $3.35, or 4.1%, to $78.88.
Despite uncertainty due to the rise in Covid-19 infections, Craig Fehr, an investment strategist at Edward Jones, said he remains optimistic about the market's recovery heading into next year.
"I think there are still more gains that can be seen in 2021. We're probably likely to see the stock market produce both volatility and returns that are a bit more consistent with historical norms," he said.
Some investors also are betting that authorities will avoid the stringent lockdown measures put in place in the spring to slow the spread of the virus, which brought the global economy to a jarring halt.
"At the moment, the market is discounting for further lockdowns and for the economy to suffer dramatically again, and I just don't see that," said Patrick Spencer, managing director at U.S. investment firm Baird. "We're in a V-shaped recovery."
A string of earnings results drove swings across the stock market.
Shares of Eli Lilly fell $9.80, or 6.9%, to $131.90, after the drugmaker lowered its profit guidance for 2020. Shares of Caterpillar fell $5.29, or 3.2% to $157.91, after the company reported profits and revenue fell during its most recent quarter.
After the closing bell, Microsoft reported higher sales fueled by pandemic-era demand for cloud-computing services. Shares ticked up 0.3% after hours. Other big tech companies, including Apple and Amazon.com, are set to report later this week.
Overseas, the Stoxx Europe 600 slipped 0.9%.
In Asia, most major equity benchmarks posted tepid declines. Hong Kong's Hang Seng Index retreated 0.5% and Japan's Nikkei 225 was little changed, while the Shanghai Composite Index ticked up 0.1%.
Write to Mischa Frankl-Duval at Mischa.Frankl-Duval@wsj.com
(END) Dow Jones Newswires