* U.S. stocks recover, Nasdaq leads gains
* European shares flat in choppy trade
* Asian shares decline, but China stabilizes
By Chuck Mikolajczak
NEW YORK, Oct 9 (Reuters) - Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by Chuck Mikolajczak. Reach him on Messenger to share your thoughts on market moves: charles.mikolajczak.thomsonreuters.com@reuters.net
TECH BOUNCE LIFTS STOCKS AT MIDDAY (1215 PM EDT/1615 GMT)
Stocks are modestly higher midday, with the Dow .DJI and S&P 500 .SPX just above the unchanged mark while the Nasdaq .IXIC is enjoying the best performance of the three indexes.
A bounce in tech shares .SPLRCT after three straight declines has helped buoy indexes. A pullback in the yield on the U.S. 10-year Treasury US10YT=RR has helped ease some of the recent selling pressure in some of the year's solid performers like Apple AAPL.O and Microsoft MSFT.O .
Materials .SPLRCM remained under pressure after the PPG Industries (NYSE:PPG)' PPG.N outlook, with weakness spreading to automakers. Ford
(Chuck Mikolajczak)
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SMALL CAPS: THE MOUSE THAT ROARED, THEN SQUEAKED (1119 AM EDT/1519 GMT)
For much of the year, smallcap stocks have outperformed their larger counterparts, with the Russell 2000 .RUT advancing 13.4 percent from Jan. 1 to its Aug. 31 high, compared with the S&P 500's .SPX 8.5 percent advance over the same time period.
Since then, the RUT has fallen more than 6 percent from its high, while the SPX has been comparatively flat.
Smallcap fortunes have varied as investors nervously eyed the various tariff spats between the United States and its major trading partners throughout the year. Smaller companies who tend to be less exposed to international trade have benefited.
But since the United States reached tentative agreements, first with Mexico and later with Canada to replace the North American Free Trade Agreement (NAFTA), the RUT has pared its YTD gains, and is now up about 6 percent compared with the S&P 500's roughly 8 percent advance.
This morning, the National Federation of Independent Business released the latest reading of its Small Business Optimism Index https://www.nfib.com/surveys/small-business-economic-trends. While still near record highs, the results showed declines in key areas, such as plans to increase employment, make capital outlays, and bolster inventories.
With fresh rounds of trade negotiations with China in the offing, and uncertainties surrounding the approaching mid-term elections, smallcap outperformance this year might have run its course.
(Stephen Culp)
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STOCKS RECOVER FROM SLUGGISH START (1024 AM EDT/1424 GMT)
Equities have rebounded from a lower open, led by gains on the Nasdaq .IXIC as heavyweights Apple AAPL.O and Microsoft MSFT.O look to help the tech sector .SPLRCT snap a three-session skid.
A dip in Treasury yields has helped ease concerns about the fast pace higher, with the 10-year yield US10YT=RR relaxing back to 3.2234 percent from an earlier high of 3.261 percent. pullback comes on the heels of comments from Federal Reserve Bank of Dallas President Robert Kaplan that the recent jump in U.S. bond yields suggests "conflicting factors," including a proposed new North America trade agreement, and is clouding overall uncertainty among investors over future economic growth prospects. .SPLRCM were on pace for their worst day since late April, however, as PPG industries PPG.N slumped roughly 8 percent after the company warned for their Q3 results, citing higher raw material costs. Mikolajczak)
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S&P 500 INDEX: VOLATILITY ABOUT TO ERUPT? (0915 AM EDT/1315 GMT)
As the S&P 500 .SPX slid to its lows on Monday, testing its support line from early May, a volatility measure was on the verge of boiling over. (Click on chart below)
By the end of the session, the SPX managed to hold the line and volatility cooled. However, with CME E-Mini S&P 500 Futures EScv1 suggesting about a 10 point drop for the index at the open, the support line (now ~2,869) can come under attack again in early trade.
And the SPX volatility measure is likely to once again press the multi-month resistance lines just slightly above its finish on Monday. Indeed, it won't take much movement for the volatility study (6.09 Monday close) to thrust above the resistance convergence (now at about 7).
A upward breakout by this study can suggest an end to the recent stretch of moribund volatility. This can coincide with an SPX break of its support line and Monday's low (2,862.08).
Such a turn can suggest risk for a major volatility spike/sharp SPX slide with the support line from early April (now 2,795) a potential magnet.
In the event volatility remains dormant, and the SPX can mount a more extensive recovery off the May support line, the September 26 low (at 2,903.28) may be a tough hurdle to reclaim.
(Terence Gabriel)
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U.S. STOCK FUTURES POINT TO LOWER OPEN (0848 EDT AM/0710 GMT)
Equities were headed for a lower open dented by concerns over global growth, Italian budget worry and the continued climb of U.S. Treasury yields.
The International Monetary Fund on Tuesday cut its global economic growth forecasts for 2018 and 2019, saying that trade policy tensions and the imposition of import tariffs were taking a toll on commerce. That comes on the heels of a selloff in China on Monday after the PBOC cut the reserve requirement for banks in an effort to spur the world's second-largest economy. from Italy's Deputy Prime Minister Matteo also weakened Italian banks and pushed European shares lower. to the soup of worries was the resumption of the climb in U.S. Treasury yields, as the 10-year US10YT=RR reached 3.261 percent, its highest level since May 2011. The U.S. bond market was closed on Monday for the Columbus Day holiday.
The recent jump in U.S. bond yields suggests there is conflicting factors clouding overall uncertainty among investors over future economic growth prospects, Federal Reserve Bank of Dallas President Robert Kaplan said on Tuesday. Other Fed officials expected to speak today include Philadelphia Fed President Patrick Harker and New York Fed President John Williams.
(Chuck Mikolajczak)
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https://reut.rs/2mKwi3Y Oct 9 2018 live markets premarket snapshot
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https://reut.rs/2yznzHt Morning levels Oct 9
https://reut.rs/2Ohbm4E Small caps vs. the broader market Image
https://tmsnrt.rs/2OdAjy6 Midday stock levels Oct 9
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