Stocks ended the session lower on Tuesday, with Wall Street taking a breather from a three-session win streak, with investors digesting the gradual relaxation of coronavirus lockdowns and the latest batch of corporate earnings.
On Monday, a trifecta of good news powered the Dow and S&P 500 Index to their best day in over a month. Yet stocks took a leg lower on Tuesday after a report late in the trading day questioned the significance of the data Moderna (MRNA) provided in assessing its experimental COVID-19 vaccine candidate. The positive results initially sent stocks on a tear, and fed optimism about a recovery from the ravages of the pandemic.
Home Depot (HD) weighed on the Dow, after the home-improvement giant reported weaker than expected quarterly profit. This came alongside declines in Walmart (WMT), which fell by the end of the session despite beating expectations for quarterly results after consumers flocked to the company’s grocery and home-goods delivery and pick-up services during the pandemic. The stock flirted with a new 52-week high before ending the session more than 2% lower.
During the session, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin failed to create any fireworks in testimony that lasted over two hours. However, both men reiterated the government’s policy support for a U.S. economy in which the risks remain firmly tilted toward the downside.
“Investors did not learn anything groundbreaking with respect to the Fed’s and US government policy response to COVID-19,” said Edward Moya, senior Market Analyst at OANDA.
“The wait-and-see economy is here and it seems the reopening of the economy will need to unfold before we can start to speculate on how much more stimulus will come into play,” he added.
States and cities are gradually relaxing restrictions that have sent the economy into a tailspin. The cautious moves have been enough to spark market hopes for a relatively brisk economic revival, and along with the potential for an effective COVID-19 treatment, have been enough to blunt the impact of ugly U.S. economic data.
4:04 p.m. ET: Stocks end lower as investors take breather after 3-day rally
Here were the main moves in markets as of 4:04 p.m. ET:
S&P 500 (^GSPC): -30.97 (-1.05%) to 2,922.94
Dow (^DJI): -390.51 (-1.59%) to 24,206.86
Nasdaq (^IXIC): -49.72 (-0.54%) to 9,185.10
Crude (CL=F): +$0.54 (+1.70%) to $32.36 a barrel
Gold (GC=F): +$12.60 (+0.73%) to $1,747.00 per ounce
10-year Treasury (^TNX): -3.3 bps to yield 0.7110%
3:12 p.m: Moderna drops more than 9% after report questions vaccine data
Moderna (MRNA) shares dropped 9%, paring some of Monday’s surge, after STAT News published an article citing experts who suggested “we ought to take the early readout” from the company’s vaccine Phase 1 trial “with a big grain of salt.”
The three major indices also dipped following the report, with the Dow falling more than 200 points.
2:45 p.m. ET: Crude oil settles at two-month high
July futures for West Texas intermediate crude oil (CL=F) settled higher by 2.1% to $32.50 per barrel on Tuesday, hitting the highest level in two months. The move higher marked the fourth straight settlement higher for the commodity, which has gained 64% since May 1 as fears of dried up demand and an oversupplied market eased. However, WTI crude remains about 46% lower for the year to date.
12:17 p.m. ET: Stocks mixed as session rolls on
Here were the main moves in markets, as of 12:17 p.m. ET:
S&P 500 (^GSPC): -3.64 points (+0.12%) to 2,957.55
Dow (^DJI): -21.85 points (-0.09%) to 23,575.52
Nasdaq (^IXIC): +51.99 points (+0.56%) to 9,284.94
Crude (CL=F): -$0.48 (-1.51%) to $31.34 a barrel
Gold (GC=F): +$9.40 (+0.54%) to $1,743.80 per ounce
10-year Treasury (^TNX): -3.3 bps to yield 0.709%
10:26 a.m. ET: Mnuchin expects ‘economic conditions to improve’ in second half of the year
Treasury Secretary Steven Mnuchin said Tuesday he anticipates “economic conditions to improve in the third and fourth quarters” this year. Mnuchin spoke during testimony alongside Federal Reserve Chair Jerome Powell before the U.S. Senate Banking Committee Tuesday morning.
The Coronavirus Aid, Relief and Economic Security Act (CARES) Act has already unleashed some $200 billion in credit support so far for businesses and individuals amid the pandemic, and has still more capital “to expand these as needed,” Mnuchin added.
Shortly thereafter, Mnuchin added, “We are fully prepared to take losses in certain scenarios” from funds that are yet to be distributed as part of the CARES Act.
9:43 a.m. ET: Nasdaq sends Luckin Coffee delisting notice after accounting fraud
Luckin Coffee (LK) disclosed Tuesday it received a delisting notice from the Nasdaq on May 15, with the exchange citing “public interest concerns as raised by the fabricated transactions disclosed by the Company in a Form 6-K on April 2, 2020.”
Luckin Coffee, a Chinese company once viewed as a competitor to Starbucks, had said earlier in April it found employees including its former chief operating officer fabricated hundreds of millions in sales in financial results last year.
The company said in a statement it “plans to request a hearing” and will remain listed on the Nasdaq for the time being, pending the outcome of the hearing.
9:31 a.m. ET: Stocks open slightly lower after weak economic data, mixed earnings
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): -7.77 points (-0.26%) to 2,946.14
Dow (^DJI): -76.82 points (-0.31%) to 23,520.55
Nasdaq (^IXIC): -9.11 points (-0.1%) to 9,228.85
Crude (CL=F): +$1.18 (+3.71%) to $33.00 a barrel
Gold (GC=F): +$3.90 (+0.22%) to $1,738.30 per ounce
10-year Treasury (^TNX): -1.3 bps to yield 0.729%
8:30 a.m. ET: Housing starts hit lowest level since 2015 in April
Housing starts tumbled more than expected in April, signaling a persistently tough housing market amid the coronavirus pandemic.
New housing starts fell by 30.2% over March to a seasonally adjusted annual rate of 891,000, or the lowest level since February 2015. Consensus economists had expected housing starts to drop by 26% to 900,000. March’s starts were revised up to 1.276 million, constituting an 18.6% decline over the prior month.
Building permits, which serve as a proxy for future home-building, also fell in April over March, but at a slower pace than expected. These dropped 20.8% to a seasonally adjusted annual rate of 1.074 million, versus a drop of nearly 26% to 1 million expected. This extended a 5.7% month-over-month decline in building permits in March.
7:43 a.m. ET: Stock futures hug the flat line, paring earlier losses after mixed earnings
Here were the main moves in markets, as of 7:43 a.m. ET Tuesday:
S&P 500 futures (ES=F): down 3.25 points, or 0.11%, to 2,944.75
Dow futures (YM=F): up 8 points, or 0.03%, to 24,515.00
Nasdaq futures (NQ=F): up 11.25 points, or 0.12%, to 9,336.75
7:33 a.m. ET: Home Depot delivers weak profit growth despite strong sales, suspends full-year guidance
Home Depot (HD) reported stronger than expected quarterly comparable sales growth, with this metric rising 6.4% versus 4.5% expected.
However, the home improvement giant’s bottom-line results missed expectations, with earnings per share of $2.08 short of estimates by 17 cents, and EBITDA falling about 11% over last year. This came as Home Depot incurred pre-tax expenses of about $850 million to roll out coronavirus-related new measures to support associates, including adding additional paid time off and weekly bonuses for hourly workers in stores and distribution centers.
Home Depot also joined a host of other companies in withdrawing its full-year guidance, citing a lack of visibility due to the coronavirus.
“While sales trends were strong at the end of the first quarter and into the first two weeks of the second quarter, as a result of the uncertainty related to the duration of Covid-19 and its impact on the broader economy, the Company is suspending its previously communicated fiscal 2020 guidance,” the company said in a statement.
7:23 a.m. ET: Walmart posts better than expected Q1 sales, profit; stock nears record high
Walmart (WMT) posted first-quarter results that topped consensus expectations on both the top and bottom lines, as the retailer benefited from a consumer run on home goods sparked during the coronavirus pandemic.
Adjusted earnings per share of $1.18 on revenue of $134.6 billion each beat estimates, which were for adjusted EPS of $1.12 and sales of $132.48 billion. U.S. comparable same-store sales, excluding gas, grew 10%, or better than the 8.6% rise expected.
E-commerce sales surged 74% during the first-quarter, with both online grocery pickup and delivery services contributing to the gain.
Shares of Walmart jumped about 5% to about $134 per share shortly after reporting results. The gains, if held into the regular session, would mark a fresh record high for the stock.
7:09 a.m. ET Tuesday: Stock futures slip, indicating lower open
Here were the main moves in markets, as of 7:11 a.m. ET Tuesday:
S&P 500 futures (ES=F): down 11.5 points, or 0.39%, to 2,936.50
Dow futures (YM=F): down 90 points, or 0.37%, to 24,417.00
Nasdaq futures (NQ=F): down 12.25 points, or 0.13%, to 9,313.25
Crude (CL=F): +$0.77 (+2.42%) to $32.59 a barrel
Gold (GC=F): +$2.40 (+0.14%) to $1,736.80 per ounce
10-year Treasury (^TNX): -2.3 bps to yield 0.719%
6:00 p.m. ET Monday: Stock futures flatten after big rally
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:15 p.m. ET:
S&P 500 futures (ES=F): 2,946.00, off -2.00 (-0.07%)
Dow futures (YM=F): 24,507.00, flat
Nasdaq futures (NQ=F): 9,332.50+7.00 (+0.08%)