By Sruthi Shankar
(Reuters) - The S&P 500 rose over 1% on Tuesday as a surge in Apple and other technology stocks helped the benchmark index recover from its worst selloff in about four months that was sparked by concerns over the coronavirus outbreak.
Markets across the world stabilized as the head of the World Health Organization (WHO) said he was confident in China's ability to contain the virus outbreak, which has killed 106 people in the country, prompted businesses to close operations and curbed travel.
President Xi Jinping later said China was sure of defeating a "devil" coronavirus.
"Investors are still trying to assess the possible impact of the coronavirus and they probably feel that yesterday's decline was a bit overdone," said Daniel Grosvenor, director of equity strategy at Oxford Economics.
"Our base case is that economic impact is likely to be relatively short-lived, but there is scope for volatility in the near-term."
The earnings season gathered pace, with Apple Inc (O:AAPL) set to report fourth-quarter results after markets close. Its shares rose 2.4% after a 3% drop on Monday amid a broader market selloff.
Investors will keep a close watch on Apple's earnings amid concerns of a disruption in iPhone production as the coronavirus spreads across major markets such as China.
The S&P technology index (SPLRCT), which led Monday's selloff, rose 1.8%, while financial stocks (SPSY) gained 1.5% as big banks rebounded.
Bolstering the recovery, data showed U.S. consumer confidence surged to a five-month high in January.
At 12:48 p.m. ET, the Dow Jones Industrial Average (DJI) gained 0.85% to 28,777.77.
The S&P 500 (SPX) rose 1.11% at 3,279.53 and the Nasdaq Composite (IXIC) was up 1.40% at 9,267.69.
Earnings are now expected to show a decline of 0.4% for the fourth quarter, according to Refinitiv data. Of the 104 companies that have reported so far, 68.3% have topped expectations, lagging the average rate of 74% from the past four quarters.
Results were mixed on Tuesday, with U.S. industrial giant 3M Co (N:MMM) sliding 5.5% after it forecast 2020 profit below expectations as weak demand from China dents overall growth.
Pfizer Inc (N:PFE) dropped 4.4% after the drugmaker reported a lower-than-expected quarterly profit and said it would no longer rely on share repurchases to help drive growth.
Shares in Xerox Holdings Corp (N:XRX) jumped 5.9% after the company's profit beat analysts' estimates as it kept a tight lid on costs.
Advancing issues outnumbered decliners by a 2.54-to-1 ratio on the NYSE and a 2.26-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and three new lows, while the Nasdaq recorded 60 new highs and 33 new lows.