Global stocks rebounded Tuesday from heavy declines, as a
relatively muted fall in Chinese shares allowed investors to focus
on upbeat corporate earnings and the Federal Reserve's
monetary-policy meeting.
European shares bounced back, with the Stoxx Europe 600 rising
1.2%. The index had dropped 2.2% on Monday as the biggest one-day
fall in eight years in the Shanghai Composite Index spilled over
into global markets.
In the U.S., S&P 500 futures rose 11 points, or 0.6%, to
2076. E-mini Dow futures gained 87 points, or 0.5%, to 17483.
E-mini Nasdaq-100 futures advanced 20 points, or 0.5%, to 4543.
Changes in stock futures don't always accurately predict moves
after the opening bell.
A rebound in U.S. shares on Tuesday would snap a five-day losing
streak that dragged the Dow Jones Industrial Average to its lowest
level in nearly six months. The blue-chip index hasn't ended at a
record since mid-May amid worries about Greece's future in the
eurozone, a swift decline in Chinese stocks and signs of slowing
growth in the world's second-largest economy.
The Shanghai Composite Index 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. While Mr. Ryan said he
didn't expect a broader spillover into economic growth, he said it
is difficult to stem fears of just that amid wild swings in Chinese
stocks and a rout in commodities.
Commodity prices steadied. Crude-oil futures slipped 0.1% to
$47.34 a barrel and gold futures lost 0.3% to $1093.10 an
ounce.
Demand for haven assets waned. Treasury prices fell, pushing the
10-year yield up to 2.263% from 2.228% on Monday.
Investors are now looking ahead to Wednesday's statement from
the Federal Reserve after a two-day meeting that begins Tuesday for
clues on the timing of an interest-rate increase that some expect
as soon as September.
Corporate earnings also attracted attention.
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% premarket 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 1.9% premarket.
DuPont Co. trimmed its earnings outlook for the year as the
company reported quarterly earnings. Shares slipped 1.6%
premarket.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and
Tommy Stubbington at tommy.stubbington@wsj.com
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