On The Fly: Top stock stories for Tuesday
Stocks began the session in relatively quiet fashion but soon tacked on losses when shares of both McDonald's (MCD) and 3M (MMM) opened for trading. The two corporate giants disappointed Wall Street with its quarterly results and account for roughly 705 of the market's losses. By noon the market had recouped its losses but it was unable to gain any upside momentum and fell back toward its lows. There was little help from the oil market as prices fell once again pushing the product to three month lows and below 443 a barrel. ECONOMIC EVENTS: In the U.S., the Federal Reserve kicked off its latest policy meeting, though it is believed that the central bank is highly unlikely to raise its benchmark interest rate when it announces the meeting results tomorrow. The S&P/Case-Shiller 20-city home price index rose 0.89% to 188.29 in May. Markit's services PMI fell 0.5 points to 50.9 in the flash July reading, versus expectations for a rise to a reading of 52.0. New home sales rose 3.5% to a cycle-high 592,000 rate in June. The Conference Board's consumer-confidence index dipped to 97.3 in July, which is still better than the 96.0 reading that was forecast by economists. COMPANY NEWS: Shares of McDonald's dropped 4.47% after the Dow member reported quarterly revenue of $6.27B, matching expectations, and U.S. comparable sales growth of 1.8%. McDonald's President and CEO Steve Easterbrook said the quarterly performance, its fourth consecutive quarter of positive comparable sales across all business segments, is a "clear indication that customers are responding" to the company's transformation, "despite a challenging environment in several key markets"... Along with McDonald's, five other members of the Dow index posted their quarterly reports this morning. Among them, United Technologies (UTX), Caterpillar (CAT), and DuPont (DD) advanced, while Verizon (VZ) and 3M declined. MAJOR MOVERS: Among the notable gainers was JetBlue (JBLU), which advanced 8.4% after the company reported quarterly results. Also higher was Chemours (CC), which rose 5.8% after David Einhorn's Greenlight Capital highlighted the stock in its quarterly letter. Greenlight said it sees an "obvious flaw" in Citron's Research's short report, and expects the stock to rise as investors focus on the company's earnings power. Additionally, Texas Instruments (TXN) gained 7.85% after the company announced better-than-expected second quarter results, with several Wall Street analyst raising their price targets on the stock and BofA Merrill Lynch upgrading TI to Buy following the report. Among the noteworthy losers was Mobileye (MBLY), which dropped 8.05% after the company reported second quarter results and said during its earnings calls that its relationship with Tesla (TSLA) will not extend beyond the EyeQ3 microchip. Also lower was Gilead (GILD), which slipped 8.47% following quarterly results and after being downgraded by Needham analyst Alan Carr on revenue growth concerns. Additionally, Sanmina (SANM) slid 15.24% after the company reported third quarter results. Following the earnings report, Craig-Hallum analyst Christian Schwab downgraded Sanmina to Hold, citing valuation. INDEXES: The Dow fell 19.31, or 0.1%, to 18,473.75, the Nasdaq gained 12.42, or 0.24%, to 5,110.05, and the S&P 500 advanced 0.70, or 0.03%, to 2,169.18.