Stocks fell on Tuesday after Republican leaders proposed a cut to expanded unemployment benefits, and shares of 3M and McDonald's dropped after their earnings reports. Losses for tech stocks weighed on the market.
AMD jumps 8% on earnings beat, upbeat forecast
Shares of Advanced Micro Devices popped more than 8% in extended trading on Tuesday after the chipmaker posted better-than-expected quarterly earnings and issued positive guidance. The chipmaker said it earned 18 cents per share in the second quarter, beating estimates of 16 cents, according to Refinitiv. Its revenue came in at $1.93 billion, versus expectations of $1.86 billion. AMD said it expects third-quarter revenue to be about $2.55 billion, plus or minus $100 million, compared with analysts' average estimate of $2.32 billion, according to Refinitiv. The company said it experienced record notebook and server processor sales in the second quarter. — Yun Li
Tuesday's sell-off by the numbers
- S&P 500 closed down 0.65% for its third negative day in four
- S&P 500 is down 0.36% year to date
- Eight out of 11 sectors were negative Tuesday led by materials down 2.18%
- Nasdaq closed down 1.27% for its third negative day in four
- Nasdaq is up 3.7% in July, on pace for its fourth straight positive month
- Dow closed down 0.77% for its third negative day in four
- Dow is up 2.19% in July, on pace for its fourth straight positive month
- Gold futures settled up 0.7% at $1,944.6, a new record close. — Gina Francolla
EBay reports better-than-expected earnings, raises full-year guidance
EBay topped Wall Street estimates for quarterly earnings and revenue as the e-commerce company benefited from a surge in online shopping amid the pandemic. EBay earned $1.08 per share in the last quarter, versus expectations of $1.06 per share per Refinitiv. Its revenue rose to $2.87 billion, beating estimate of about $2.8 billion. The company also raised its full-year guidance. Shares of eBay dipped about 1% in after-hours trading.— Yun Li
Starbucks suffers quarterly loss but beats expectations
Starbucks posted a quarterly loss during its fiscal third quarter as its same-store sales plunged 40% amid the coronavirus pandemic. The world's largest coffee chain said it lost 46 cents per share in the last quarter, compared to a loss of 59 cents expected, according to Refinitiv. Net sales dropped 38% to $4.22 billion, topping expectations of $4.07 billion. Global same-store sales plummeted 40% during the quarter. Shares of Starbucks rose more than 2% in extended trading. — Yun Li
Stocks selloff into the close
Stocks extended losses in the final hour of trading, with shares of major tech companies weighing on the market. The Nasdaq was the worst performer of the major indexes, dropping 1.3%. The Dow and S&P 500 lost 0.8% and 0.6%, respectively. — Jesse Pound
'No bill will pass the Senate' without liability protection, McConnell says
Senate Majority Leader Mitch McConnell told CNBC's Kayla Tausche that Republicans will not pass a coronavirus relief bill that includes expanded liability protections for corporations and other entities, including schools.
"There's no chance of the country getting back to normal without it. None whatsoever. As the majority leader I can tell you that no bill will pass the Senate that doesn't have a liability protection in it. The Democrats need to understand for the country to get back to normal we cannot have an epidemic of lawsuits on the heels of a pandemic that is not over yet," McConnell said on "Closing Bell."
McConnell was also asked about the nomination of Judy Shelton to the Federal Reserve's Board of Governors, which two Republicans have come out against. The Kentucky senator said, "We're taking a look at the nomination, and we'll let you know when we are in a position to move forward with it." — Jesse Pound
Final hour of trading: Stocks slip as traders look for clues on stimulus
The major averages were slightly lower heading into the close as traders turned to Washington for clues about the next coronavirus relief package. The S&P dipped 0.1% and the Nasdaq Composite dropped 0.7%. The Dow Jones Industrial Average fell 85 points, or 0.3%. —Fred Imbert
The gold rally is just beginning, analyst says
Gold prices are at an all-time high, but this may just be the start of a long-term upward trend for the yellow metal as the U.S. dollar could be under pressure for a while, according to Ryan Giannotto of GraniteShares. "The Fed real overplayed their hand with intervention on monetary policy," said Giannotto, the firm's director of research. "Now there's a growing consensus that the dollar is not what it used to be, and that is highly problematic." Giannotto noted that "you can's just inject $3 trillion into the economy without hurting the dollar." Gold hit a fresh all-time high of $1,974.70 per ounce and is up nearly 30% for 2020. —Fred Imbert
Stocks in the 'early stage' of a bull market, SunTrust says
Keith Lerner of SunTrust/Truist Advisory said in a note there is evidence suggesting a new bull market kicked off in late March following the coronavirus-induced plunge earlier in the year. "Bull markets tend to begin after pessimism and indiscriminate selling reach a crescendo. This is consistent with very low investor expectations, which sets the stage for positive surprises," said Lerner, the firm's chief market strategist. "The extreme selling and negative investor sentiment readings seen around the March low is consistent with major market bottoms: 78% of S&P 500 stocks made 52-week lows then, the highest since October 2008. Additionally, equity mutual and exchange traded fund outflows reached near record levels." The S&P 500 has rallied more than 40% since March 23. —Fred Imbert
Wells Fargo board approves lower dividend
Wells Fargo announced that its board of directors has approved its diminished dividend of 10 cents per share, payable on Sept. 1. The bank previously paid a divided of 51 cents per share but announced that it planned to cut the payout after receiving results from the Federal Reserve's stress test in June. The bank then said that it planned for the 10 cent rate when it released its second quarter results. — Jesse Pound
Stocks making the biggest moves midday: Pfizer, 3M, Harley-Davidson
Harley-Davidson — Shares of Harley-Davidson tanked nearly 8% after the motorcycle maker posted an unexpected quarterly loss. The company reported a loss of 60 cents per share, compared to expectations of a 4 cents per share profit, according to Refinitiv.
Check out more stocks moving midday here.— Maggie Fitzgerald
Markets at midday: Stocks dip amid coronavirus relief debate
The major averages traded flat to lower around midday as Wall Street monitored lawmaker negotiations on the next coronavirus stimulus package. The Dow slipped 67 points, or 0.3%. The Nasdaq Composite also dropped 0.3%. The S&P 500 hovered around the flat line. —Fred Imbert
Reopening stocks move higher
The broader market continued to trade in negative territory late Tuesday morning, but some of the stocks most tied to a full economic reopening were some of the biggest winners in the S&P 500. Wynn Resorts and MGM Resorts gained 5.8% and 3.6%, respectively, while Simon Property Group rose more than 3.7%. Cruise stocks Norwegian and Carnival were also moving higher. — Jesse Pound
Consumer confidence weakens in July
The U.S. consumer confidence index fell to 92.6 in July, down from a revised 98.3 in June, according to The Conference Board. Economists polled by Reuters expected a reading of 94.5 in July, down from the previously reported 98.1 in June. The decline in confidence came as cases of Covid-19 continued to climb across the country. — Jesse Pound, Reuters
Kodak shares skyrocket on government loan news
Shares of Eastman Kodak soared by around 300% after the U.S. government awarded the photography pioneer a $765 million loan to start producing drug ingredients. The rally sent the stock to its highest level since early 2018. Kodak has also traded 84 million shares about 30 minutes into the session, blowing past its 30-day volume average of 280,169. The company has lost a big chunk of its market value in recent years. Entering Tuesday's session, Kodak's market cap was just $116 million, down from nearly $7 billion in 2013. —Fred Imbert
Here are the biggest analyst calls of the day: Shopify, Tesla, Alphabet & more
- Seaport initiated Kellogg and Mondelez a buy.
- Raymond James initiated Bristol-Myers Squibb as outperform.
- Goldman Sachs upgraded Shopify to buy from neutral.
- Bernstein downgraded Tesla to underperform from market perform.
- Deutsche Bank raised its price target on Alphabet to $1,975 from $1,700.
Pro subscribers read more here. — Michael Bloom
Stocks fall in opening trades
The three major indexes all fell in the opening minutes of Tuesday's session. The Dow fell 84 points, or 0.3%, while the S&P 500 and Nasdaq lost 0.2% and 0.3%, respectively. Investors were awaiting key news in the days ahead, including a meeting from the Federal Reserve and the earnings of major tech companies. — Jesse Pound
Buffett adds to Bank of America stake
Warren Buffett's Berkshire Hathaway bought more than 16 million shares of Bank of America over the past week at an average price of just over $24 per share, according to a securities filing. These transactions brought Berkshire's total stake in the bank to more than 998 million shares with a market value of roughly $24.1 billion. — Jesse Pound
Goldman upgrades Shopify to buy after missing 140% rally this year
Goldman Sachs hiked its Shopify rating to buy from neutral on Tuesday, admitting to missing its massive run this year. "While we acknowledge that we have missed a significant run up in SHOP shares (up 140% in the YTD), we would point out that SHOP has one of the largest Total Addressable Markets in software, which we measure at $200bn globally," Christopher Merwin, Goldman equity analyst, said in a note on Tuesday. The bank maintained its recently-increased price target of $1,127, which represents more than 15% upside for the stock. Shares of the Canadian e-commerce company gained 3% in premarket trading following the upgrade.
CNBC Pro subscribers can read more here. — Yun Li
Federal Reserve kicks off two-day policy meeting
Members of the Federal Reserve's policymaking committee begin a two-day meeting on Tuesday amid a resurgence in coronavirus cases in critical states like Texas, California and Florida. While market analysts said they don't expect any policy adjustments announced on Wednesday, the Federal Open Market Committee is expected to reiterate its commitment to near-zero interest rates and easy lending amid the economic downturn.
"To be clear, from an actual policy standpoint, it's universally expected that the Fed won't make any changes to 1) Rates or 2) QE," wrote Tom Essaye, editor of the Sevens Report. "But the Fed does have some important decisions that need to be made on 1) Forward guidance and 2) The amount/length of the QE program, so what will likely make tomorrow's meeting positive or negative for stocks is if/what the Fed says about those two issues." — Thomas Franck
Republicans propose smaller unemployment benefits, another round of checks
The Republican plan for another round of coronavirus relief includes cutting the weekly expanded unemployment benefit and another round of stimulus checks and the Paycheck Protection Program. The plan also includes $105 billion for schools and $16 billion to boost Covid-19 testing. The plan to cut unemployment benefits was met with strong opposition by Democrats. — Jesse Pound, Jacob Pramuk
3M shares fall after reporting disappointing quarterly results
Shares of 3M fell nearly 3% in premarket trading on Tuesday after the industrial conglomerate missed Wall Street estimates for quarterly profit and revenue. The company reported quarterly earnings of $1.78 per share, 2 cents a share below estimates, according to Refinitiv. Its net sales fell to $7.2 billion from $8.2 billion in the quarter, hurt by a plunge in demand across its business units due to the coronavirus crisis. The world's biggest mask maker also said it was on track to meet its target of doubling its global output of N95 respirator masks. — Yun Li
McDonald's revenue drops 30%
Shares of McDonald's slid more than 2% during premarket trading on Tuesday after the company said that revenue fell 30% in the second quarter amid the coronavirus pandemic. The company earned 66 cents per share on an adjusted basis, compared with the 74 cents analysts polled by Refinitiv had been expecting. Although it was McDonald's largest miss in more than three decades, the estimates covered a wide range from 50 cents per share to $1.27 per share. Revenue came in at $3.77 billion, which topped the expected $3.68 billion. - Amelia Lucas, Pippa Stevens
Tesla falls after Bernstein downgrade
Toni Sacconaghi, an analyst at Bernstein, downgraded Tesla to underperform from market perform, citing concerns about the electric-car maker's valuation. "Tesla's current valuation is mind-boggling – its EV has now matched Toyota and Volkswagen combined and is up nearly 500% in less than a year – unprecedented for a large cap stock outside of the tech bubble," Sacconaghi wrote. Tesla shares dropped 2% in the premarket. —Fred Imbert
Stock futures fall as the busiest week of the earnings season continues
U.S. stock futures were under pressure on Tuesday after a mixed batch of corporate earnings while traders pored over a coronavirus stimulus relief plan from Senate Republicans. Dow Jones Industrial Average futures were down by 150 points, or more than 0.5%. S&P 500 futures traded 0.4% and Nasdaq 100 futures slid 0.5%. —Fred Imbert