What to watch today: Stocks poised to fall as market watches retailers
BY THE NUMBERS
Dow futures pointed lower Tuesday morning, the day after setting a fresh record high. Futures contracts tied to the bluechip average were off more than 200 points in early trade as investors awaited the latest report on retail sales, a day ahead of the release of minutes from July's Federal Reserve meeting. Along with the sales figures, investors digested earnings from big-ticket retailers including Walmart and Home Depot. Major averages notched their fifth straight positive session Monday after erasing earlier losses.
Bond yields dipped Tuesday morning as investors moved to safe-haven fixed income to protect against stock market volatility and concerns over economic growth. Government bond yields fell across the board, with the benchmark 10-year note most recently around 1.22%, well off where it traded late last week. Yields fell even though Boston Fed President Eric Rosengren told CNBC's Steve Liesman on Monday that he wants to see the central bank taper its bond purchases before the end of the year and stop altogether around mid-2022.
Home Depot shares fell 3.6% premarket even though the Dow component's earnings topped Wall Street estimates. The home improvement chain saw a 5.8% decline in customer transactions from a year ago, a time when do-it-yourself projects were popular due to the pandemic lockdown. Walmart shares also dropped, again falling 1.2% after the company beat expectations and raised its full-year forecast.
*Fed's Eric Rosengren backs tapering in the fall but no rate hikes until job market improves
*S&P 500 doubles from its pandemic bottom, marking the fastest bull market rally since WWII
IN THE NEWS TODAY
Flights resumed from Kabul's international airport Tuesday after a frenzied and panic-filled Monday that saw thousands of Afghans swarm the tarmac in attempts to get out of Afghanistan. Crowds were trying to flee Kabul after the Taliban took over the government following the exit of U.S. troops. President Joe Biden gave a televised address in which he blamed the chaos on a deal that former President Donald Trump struck with the military insurgents, along with the unwillingness of the Afghani military to fight.
Covid-19 cases continued to surge, but with the biggest impact coming from five states – Oregon, Hawaii, Louisiana, Mississippi and Florida. Even with the alarming numbers in the states that have low vaccination rates, less than 11% of all hospital beds nationwide are being used by Covid patients. The U.S. is expected to recommend booster shots eight months after getting the initial vaccination.
Roblox (RBLX) lost 25 cents per share for its latest quarter, one cent a share wider than expected. Revenue for the video game operator also fell short of analysts' forecasts. Roblox had been a beneficiary of pandemic restrictions that kept people at home, but that positive influence waned as vaccinations increased and people spent more time out of the home. Shares tumbled 5.6% in the premarket.
Spirit Airlines lost 4.4% in premarket action after the airline said its recent operational problems cost it about $50 million. Spirit canceled more than 2,800 flights between July 30 and Aug. 9, amid problems related to weather, staffing and technical issues.
Didi Global (DIDI) saw a number of major hedge funds and investors buying shares in the Chinese ride-hailing giant, according to quarterly Securities and Exchange Commission filings. Investors include George Soros, Tiger Global and Singapore state investment fund Temasek. Didi went public in June, but shares plunged after China announced a probe of the company. Didi fell 2% in the premarket.
Tencent Music Entertainment saw shares slide 3.8% premarket after the music streaming service's revenue fell short of analysts' forecasts despite an increase in advertisements and paid subscribers.
Merck spinoff Organon (OGN) rose 1.6% in premarket trading, as Warren Buffett's Berkshire Hathaway (BRK.B) reported a small stake in the core therapeutics specialist.
T-Mobile (TMUS) confirmed earlier reports that it had been the victim of a data breach, but said it could not yet determine the extent of the breach and what customer data may have been stolen.
Cowen added Chipotle Mexican Grill (CMG) to its "conviction" list, saying it was pleased with Chipotle's second-quarter results and that the company has sales drivers in place that will sustain improvement.
Endeavor (EDR) reported quarterly profit of 19 cents per share, compared to analysts' expectations of a 2 cents per share loss. Revenue came in very slightly short of estimates. Endeavor also raised its full-year revenue outlook on increasing demand for live events among other factors, and shares added 1.8% in the premarket.
Stanley Black & Decker (SWK) struck a deal to buy the 80% of MTD Holdings that it did not already own for $1.6 billion in cash. Stanley Black & Decker had bought a 20% stake in the privately-held outdoor power equipment maker in 2019.