July 20th, 2010
05:44 PM ET

Stocks bounce back after early plunge

A look at highlights from the day's business news:

Wall Street stages a comeback

Stocks closed higher Tuesday, recovering from steep loses earlier in the session, as investors looked forward to earnings from Apple and speculated about possible moves by the Federal Reserve.

The Dow Jones industrial average rose 75 points, or 0.7 percent. The S&P 500 index rose 12 points, or 1 percent, and the Nasdaq composite gained 24 points, or 1 percent.

Stocks plunged at the open and struggled for most of the morning as investors digested a big drop in quarterly earnings from Goldman Sachs and a lower profit outlook from Johnson & Johnson. Weaker-than-expected revenues from IBM also weighed on the market.

But the tone improved in the afternoon on chatter that the Fed is considering additional steps to encourage bank lending. Ben Bernanke, chairman of the U.S. central bank, is scheduled to testify before Congress on Wednesday.

Shortly after the market closed, Apple reported its best quarterly results on record due to strong Macintosh sales and overwhelming demand for its iPad device.

Investors have been focused on quarterly results, with over 120 companies due to report this week.

Treasurys gain on weak earnings, housing data

Treasury prices gained ground Tuesday, with the two-year yield falling to a record low and the 10-year yield slipping to the lowest in nearly three weeks, as disappointing earnings and housing data boosted demand for the safety of U.S. government debt.

The benchmark 10-year rose 3/32 to 104-21/32 and its yield fell Tuesday to 2.95 percent from 2.97 percent late Monday. Bond prices and yields move in opposite directions.

Earlier Tuesday, the 10-year note's yield fell to 2.89 percent, the lowest since July 1.

The two-year note edged up 1/32 to 100-3/32 and its yield was 0.59 percent. The
yield had slipped below to an all-time low of 0.57 percent earlier in the day. The 30-year bond was flat at 106-27/32 and its yield was 3.98 percent, while the five-year note gained 2/32 to 100-28/32 with a yield of 1.69 percent.

The safe-haven appeal of Treasurys rose Tuesday as a worse-than-expected government housing report and earnings from Goldman Sachs renewed investor concerns about the economy. Because Treasurys are backed by the U.S. government, they are viewed as low-risk investments and are attractive during times of economic uncertainty.

CNNMoney.com reporters Ben Rooney and Hibah Yousuf contributed to this report.

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soundoff (2 Responses)
  1. Ken Krieger

    I was taught in school that George Washington never told a lie. This Obama never tells the truth.He tells lie after lie. We elected him to heal us. He has divided us. The Liberal Media and Obama are using "Race Baiting" to get votes. Black People hate White People. Obama wants Hispanics to hate us. His re-election coalition is Hispanics, Blacks, Unions, Liberal Elite, Gays, Lesbians, and the Looney Left. He will not do anything for them because they will vote for him any way. Why isn't his coalition all people? Ken Krieger 239-283 7385 Cape Coral, Florida

    July 20, 2010 at 6:59 pm | Report abuse |
  2. Nadogryazi

    Long you awake to search such miracle

    December 11, 2010 at 5:33 am | Report abuse |