Morning Brief

What to watch today: Wall Street under some pressure after tech profit-taking

BY THE NUMBERS

Dow futures were pointing to a modest decline at Wednesday's open as investors digest two breaking stories. First up, the U.S. said Wednesday morning that it has agreed to pay $1.95 billion for Pfizer to produce and deliver nationally 100 million doses of its Covid-19 vaccine candidate if it proves safe and effective in humans. Secondly, the State Department confirmed an order to close the Chinese consulate in Houston to protect American intellectual property and the private information of U.S. citizens. Beijing has vowed to retaliate. (CNBC)

Profit-taking in high-flying tech stocks Tuesday, including Dow stocks Apple and Microsoft, held back the Dow Jones Industrial Average, which closed 0.6% higher. The Nasdaq, after hitting an intraday record early in Tuesday's session, finished nearly 1% lower. Tech stocks were generally steady in Wednesday's premarket trading. (CNBC)

Microsoft and Tesla report their quarterly results Wednesday afternoon. If Tesla were to deliver a profit, the company would meet a major requirement it needs to join the S&P 500. Despite Tuesday's drop in Tesla shares, CEO Elon Musk qualified for a payout worth $2.1 billion, a second windfall since May following the massive surge in the electric auto maker's stock. (Reuters)

Late Tuesday, United Airlines reported a smaller-than-expected loss of $9.31 per share in the second quarter on revenue of $1.48 billion, which exceeded projections. However, sales plunged 87% from the year-earlier period as the coronavirus pandemic decimated air travel demand. United expects to reduce its cash burn by nearly 38% to $25 million a day in the third quarter. (CNBC)

On today's economic calendar, the National Association of Realtors is out with existing home sales for June at 10 a.m. ET, with forecasts calling for a 21% surge to an annual rate of 4.73 million units. With mortgage rates around record lows, total home loan application volume last week rose 4.1%. Last week, 30-year fixed-rate mortgages remained around 3%. (CNBC)

Bill Ackman's Pershing Square Tontine Holdings is set to become the largest special purpose acquisition company, or SPAC, in history when it begins trading today. SPACs are also known as a blank check companies. Pershing Square Tontine will raise $4 billion by offering 200 million units at $20. (CNBC)

* Ackman: Pershing Square 'taking no compensation' for new SPAC investment vehicle (CNBC)
* Ackman: 'We are long-term bullish on America' but betting against high-yield companies (CNBC)

IN THE NEWS TODAY

The daily death toll in the U.S. from the coronavirus topped 1,000 on Tuesday for the first time since May 29, according to the Covid Tracking Project. Texas and Florida posted records in average daily new deaths six times in the previous seven days.

Texas, as of Tuesday, saw five straight days of new cases over 10,000, according to data from Johns Hopkins University. Florida, as of Tuesday, saw eight straight days of new infections over 11,000. Nationally, there were more than 60,000 new Covid-19 cases Tuesday, a continuation of elevated levels but lower than two 70,000-plus days last Thursday and Friday.

President Donald Trump, resuming coronavirus press briefings, said Tuesday evening the pandemic in the U.S. will probably "get worse before it gets better." Trump also urged Americans to wear masks to help contain the virus, following months of his resistance to facing coverings. (CNBC)

Trump says U.S. 'in the process' of crafting coronavirus strategy that has 'developed as we go along' (CNBC)

STOCKS TO WATCH

UBS downgraded Macy's (M) and Kohl's (KSS) to "sell" from "neutral," saying brands can no longer depend on malls or department stores to drive customer traffic. UBS also said the market does not fully appreciate how much Covid-19 will permanently disrupt the retail landscape.

Snap (SNAP) matched Wall Street forecasts with a quarterly loss of 9 cents per share, while the Snapchat parent's revenue beat estimates. Daily active users rose.

Best Buy (BBY) said its overall sales are up about 15% since it began reopening its stores in mid-June. The electronics store chain's online sales have more than tripled during the current quarter through July 18.

Spotify (SPOT) has struck a new long term licensing deal with Vivendi's Universal Music Group. The deal could result in Spotify making money from the music companies by providing marketing, data, and analytics information.

Texas Instruments (TXN) beat estimates by 60 cents a share, with quarterly earnings of $1.48 per share. The chipmaker's revenue was also above forecasts. Texas Instruments forecast better-than-expected revenue for the current quarter, as demand for its wide array of chips rebounds from the effects of the pandemic.

iRobot (IRBT) reported quarterly earnings of $1.06 per share, significantly higher than the 29 cents a share consensus estimate. Revenue was also above estimates. Consumers staying at home due to the pandemic helped fuel stronger sales of the company's Roomba automatic vacuum cleaner. The company also raised its revenue forecast.