A half percentage point drop never looked so good! The market was on its way to another one of those 2% plunges that we've grown accustomed to in this rough month, but an impressive rally in the second half allowed it to recoup most of the losses. In the end, the major indices were still down for the session. However, a 125-point drop in the Dow looks a whole lot better than a 550-point collapse. The index came under pressure right from the start Tuesday on some disappointing results from industrial leaders like Caterpillar and 3M. Thankfully, the selling seemed to run out of steam in the afternoon. A gradual rebound left the Dow with only a 0.50% loss by the closing bell to 25,191.43. It came about 425 points off of its low. The other major indices followed the same route during the session. The S&P finished with a decline of 0.55% to 2740.69. The NASDAQ briefly poked its head into the green, but settled with a decline of 0.42% to 7437.54. Selling picked up a bit in the final hour as the indices weren't quite ready to finish on the plus side. “Today didn’t feel like a bottom, but the rally to unchanged on the day was a positive sign,” said Jeremy Mullin in Counterstrike. It was fun to watch stocks shout “Enough!” on Tuesday when another epic pullback seemed inevitable. However, earnings season has yet to take the market’s mind away from all the looming uncertainties, including rising rates, trade problems and global events such as the EU rejecting Italy’s budget and the ongoing drama with Saudi Arabia over the killing of Jamal Khashoggi. Tomorrow brings a new group of earnings reports, and a lot of attention will be paid to Microsoft followed by FANGs Amazon and Alphabet on Thursday. In addition to all the other potential headwinds at the moment, investors are also worried about the once-unstoppable tech sector. Strong reports from these names could give this market the charge that it needs. Today's Portfolio Highlights: Income Investor: Today’s earnings reports really cleared things up for Ryan. The market apparently wants to move away from stocks exposed to the trade conflicts and toward more defensive spaces. And so will this portfolio. Therefore, the editor sold Caterpillar (CAT) on Tuesday to protect a 16.7% profit. This construction & mining equipment giant beat on both the top and bottom lines, but rising costs scared the market. For the same reasons, he also sold Air Products & Chemicals (APD) for a 5.3% return and Illinois Tool Works (ITW), which is scheduled to report tomorrow. The new buys are General Mills (GIS) and Target (TGT), which are more defensive, less riskier names that Ryan thinks will find favor in a market dealing with a number of uncertainties. Earnings estimates for both of these names are slowly moving higher. GIS yields 4.4% with sales that are expected to improve 8.5% this year. TGT yields 3.1% and is expected to grow earnings and sales by 14% and 4.4%, respectively. Plus, the strong consumer will be a big help to TGT as we near the holiday shopping season. Read a lot more about these moves in the complete commentary. Zacks Short List: This week's adjustment included only one change. The portfolio short-covered Incyte (INCY) and replaced it by adding QUALCOMM (QCOM). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide. Options Trader: "What a day! Stocks opened sharply lower. Proceeded to go even lower still. Then a wave of buying came in. And then another. And by day’s end, after being down by more than -2%, finished the day with a much more modest -0.50% loss. "In spite of the lower close, it was an extremely impressive day. And the strong finish on above average volume made it even more impressive. Amid the backdrop of such a strong economy, and a better than expected earnings season so far, the sell-off appears to have run its course. And today, the buyers were back! "That doesn’t mean we won’t see any more down days. We surely can. But the low of this pullback really does look like it might have been made yesterday." -- Kevin Matras Have a Great Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >> Zacks Investment Research