Stocks have turned higher in late-morning trading

U.S. stock rose in morning trading on Tuesday, recovering from an earlier decline after Federal Reserve Chairman Jerome Powell indicated the U.S. central bank wouldn’t move too quickly in changing monetary policy, and that it would be flexible in the face of changing conditions.

Traders also digested the latest round of corporate earnings, which showed strong growth, although not always as strong as had been anticipated.

What are markets doing?

The Dow Jones Industrial Average  added 18 points at 25,083. The S&P 500   was up by 4 points, or 0.2%, to 2,802, with eight of its 11 main sectors trading higher. Materials and consumer staples were leading gains, up about 0.6%. The Nasdaq Composite Index  advanced by 10 points, or 0.1%, to 7,816.

What is driving the market?

Appearing in front of the Senate Banking Committee, Jerome Powell said the “best way forward is to keep gradually raising the federal funds rate for now.” This was seen as suggesting that the central bank wouldn’t become too aggressive in raising rates, something that is widely seen as a risk to markets.


The main driver for individual stocks, however, is quarterly results, with a batch of Dow components and other major companies setting the early tone for the market.

Goldman Sachs Group Inc. reported second-quarter earnings that rose above expectations, but . In a separate internal memo, the investment bank also announced that CEO Lloyd Blankfein would step down Oct. 1 and be replaced by President David Solomon. Shares were down 1.4%.

Johnson & Johnson reported second-quarter earnings and revenue that were better than expected but consumer sales failed to impress. Shares were up 4.1%.

UnitedHealth Group Inc. shares slumped 3.4% after the health-care coverage and benefits company reported second-quarter earnings that beat expectations but premiums that missed.

Netflix Inc. shares  tumbled 8% after the streaming-media company late Monday reported . Both revenue and subscriber numbers came in weaker than expected. Netflix is technically a classified as a consumer-discretionary company but it tends to influence shares of internet-related companies.

What are strategists saying?

Krishna Guha, head of global policy and central bank strategy at Evercore ISI, singled out the phrase “for now” as a critical one for diving future Fed policy.

“The phrase ‘for now’ hints that while the Fed has a strong orientation to some further quarterly rate hikes, we may not be very far in time and in rate space from the point at which the case for further hikes will be less automatic,” Guha said.

Lindsey Bell, investment strategist at CFRA, said that “Earnings results have been generally good so far and even though it’s still early in the season, it appears that investors are rewarding companies that are reporting profits above expectations.”

What’s on the economic calendar?

rose 0.6% in June to more than offset a similarly sized decline in May, the Federal Reserve said Tuesday. That was a tick above the MarketWatch forecast.

was unchanged at 68 in July.


Which stocks are in focus?

CSX Corp.  and United Continental Holdings Inc.  are among companies on the earnings docket after the market’s close.


Papa John’s International Inc. stock  was down 1% after the pizza company’s founder said it was a “mistake” to .

What are other markets doing?

, but Japan’s Nikkei 225 index  bucked the negative trend.

Trading in Europe was mixed, leaving the benchmark Stoxx Europe 600 index struggling for direction.

Oil prices  continued to slide, after steep declines on Monday when chatter about possible releases from global reserves sent Brent crude  and .

Gold futures  inched lower by 0.9% at $1,228 an ounce on Tuesday.

The ICE U.S. Dollar Index a measure of the dollar against a half-dozen currencies, meanwhile, rose 0.3% to 94.784.