NEW YORK (CNNMoney.com) -- U.S. stocks were set to bounce back Wednesday, following the worst session in more than 2 months, as investors digest a batch of financial results from Morgan Stanley, Boeing and Wells Fargo.
Investors around the world fled stocks Tuesday after China unexpectedly raised interest rates, heightening concerns that cooling growth in China would drag on global growth. Major U.S. stock indexes posted the biggest one-day declines since early August.
"China's rate hike was a bit of a curve ball that created chaos and uncertainty," said Peter Bible, a partner at EisnerAmper. "But as investors digested it, they realized that the move was largely symbolic to help moderate China's growth -- not curtail it."
Bible added that as long as economic and corporate news remains positive, stocks should recover the ground lost in the previous session and post gains.
"The market has performed remarkably well over the past couple of months, and investors are cautiously optimistic," he said.
Companies: Shares of Wells Fargo (WFC, Fortune 500) fell 2% after the bank posted a profit of $3.15 billion, or 60 cents per share -- up 19% from a year ago and above what analysts estimated. The San Francisco-based bank's sales came in line with expectations at $20.9 billion.
Morgan Stanley (MS, Fortune 500) reported a profit of $313 million, or 5 cents per share, for the third quarter -- down $67% from a year ago, due to a weak trading environment. Revenue also tumbled 20% compared to a year ago. Shares dropped 2% in premarket trading.
The aircraft maker also raised its guidance for the remainder of the year to between $3.80 and $4.00 per share, thanks to an improved outlook for commercial airplanes. Shares spiked 2.3% in premarket trading.
Yahoo (YHOO, Fortune 500) reported higher net income from the year-ago period after U.S. markets closed Tuesday. But the company posted sales that fell short of expectations. Shares rose 2% in premarket trading.
Economy: The Federal Reserve is due to release its Beige Book of economic conditions at 2 p.m. ET.
The Fed's monetary policy has been in focus as investors anticipate the central bank's launch of a new round of so-called quantitative easing -- a program of asset purchases -- at the conclusion of its meeting on Nov. 3.
World markets: European markets turner higher in afternoon trading. The CAC 40 in France gained 0.5%, DAX in Germany rose 0.3%, and Britain's FTSE 100 posted slight gains.
Asian markets mostly finished lower on Wednesday, as investors got their first chance to react to China's rate hike. Japan's benchmark Nikkei tumbled 1.7% and the Hang Seng in Hong Kong dropped 0.9%. Shares in Shanghai closed a shade higher.
Oil prices for November delivery increased 67 cents to $80.16 a barrel.
Gold futures for December delivery rose $5.40 to $1,341.40 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury was unchanged, and the yield held steady at 2.48%.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.90%||3.89%|
|15 yr fixed||2.96%||2.93%|
|30 yr refi||4.00%||4.00%|
|15 yr refi||3.06%||3.03%|
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