US open: Markets rally for the first time in three days

US stocks rallied on Tuesday as better than expected earnings from Citigroup and Johnson & Johnson turned markets positive for the first time in four days.

There was mixed data from Europe, with UK inflation slowing to a five-year low, while the German government cut its economic forecasts for this year and next. Consumer prices fell in Sweden and Spain.

“Following a sharp decline to indices at the close of US equities on Monday night, prices have once again stabilised for the time being,” said David White, financial trader at Spreadex.

“The extent to which global growth concerns are being played out in prices currently shows just how vulnerable the market is to the idea of equities being overvalued.

“This could be a relatively normal stage in this bull-run, where investors seek to re-balance based on anxiety. This in itself could help to promote the longevity of performance for equities by removing some of the so-called froth.

In equity markets' favour, the S&P 500 has still to confirm the loss of its so-called 200-day moving average and is well inside 'oversold' territory, as technical analysts would say.

In corporate news, Johnson & Johnson rose early on after its third quarter results exceeded estimates and the firm raised its full year estimates, while Citigroup gained as much as 2.5% as lending improved and bond-trading revenue increased.

Wells Fargo & Co. slipped even though the bank’s revenues beat estimates and quarterly profit was on target, while JP Morgan swung to a third quarter profit, but shares fell as the banking giant’s revenue and profits per share missed expectations.

Versar surged as fears over an Ebola outbreak continue to grow, though Lakeland Industries and Alpha Pro Tech plummeted over 20% after soaring over the last couple of days in the wake of Ebola-related panic.

Domino’s Pizza rose sharply after delivering better than expected results.

Apple is bouncing back after having slipped earlier on the heels of the Irish government's announcement that it will move to close some of its corporate-tax loopholes.

The yield on the 10-year Treasury note dropped six basis points to 2.23%, while the yield on the 30-year Treasury bond fell four basis points to 2.98 and the yield on the five-year note shed eight basis points to 1.46.

Gold futures edged forward a little, while the price of West Texas intermediate crude continued to fall, losing almost two percentage points and trading at just over $84 a barrel.

The dollar moved up against the pound and the euro but was in retreat against the yen.