Stocks spent the day trading with little volatility, but a downward bias, as the volume of earnings reports has begun to ramp up and results can best be described as mixed. Bank of America (BAC) became the latest big bank to report better than expected profits but cut its full-year net interest income outlook as the Fed is widely expected to begin cutting rates.
ECONOMIC EVENTS: In the U.S., the housing report undershot estimates with downside surprises in both June weakness and prior month downward revisions. Housing starts fell 0.9% to a 1.25M home rate in June after falling 0.4% to a downwardly revised 1.265M rate in May. Building permits dropped 6.1% to a 1.22M rate in June.
In Federal Reserve news, the latest Beige Book from the Fed said that economic activity continued to expand at a "modest pace" from mid-May through early July, with little change from the prior reporting period. Employment grew at a "modest pace" during the period, slightly slower than the previous reporting period, according to the Beige Book. In addition, inflation was "stable to down slightly" from the last period, the Fed noted.
TOP NEWS: CSX (CSX) shares fell 10.3% after the railroad operator reported Q2 results that missed consensus, reduced its revenue guidance and provided more muted commentary on demand. Shares of Bank of America fared better, rising fractionally, while Abbott (ABT) gained 3.1% on the heels of its quarterly results.
Amazon (AMZN) announced that Prime Day was "once again the largest shopping event in Amazon history", reporting that sales over the two-day event "surpassed the previous Black Friday and Cyber Monday combined." Prime members purchased more than 175M items throughout the event and Prime Day was "the biggest event ever for Amazon devices," reported the company, which did not offer any details on revenue or gross merchandise volume.
Microsoft (MSFT) and AT&T (T) announced a multiyear alliance that will make the tech giant the preferred cloud provider for non-network applications as part of AT&T's broader public cloud first strategy. Though financial details were not disclosed, a person familiar with the matter told Josh Lipton of CNBC that the strategic alliance announced this morning by the companies is worth over $2B.
Meanwhile, CNN reported that the World Health Organization announced that it now views the ongoing Ebola outbreak in the Democratic Republic of Congo as a "public health emergency of international concern." NewLink Genetics (NLNK) previously reported on November 15, 2018, that Merck (MRK) had begun the submission of a rolling biologics license application, or BLA to the FDA for V920, an Ebola vaccine.
MAJOR MOVERS: Among the noteworthy gainers Macom (MTSI), which rose 13% after Piper Jaffray analyst Harsh Kumar upgraded the stock to Overweight from Neutral. Also higher was Seattle Genetics (SGEN), which gained 19% after reporting quarterly results.
Among the notable losers was Inovio (INO), which slid 9.7% after the company announced plan to focus on the commercial development of its late-stage HPV assets, that it has cut selected early-stage R&D programs and discontinued further development of its Phase 1/2 study in advanced bladder cancer. Also lower was Nu Skin (NUS), which fell 14.6% after reducing its guidance for the year, primarily due to a lowered revenue outlook in Mainland China.
INDEXES: The Dow fell 115.78, or 0.42%, to 27,219.85, the Nasdaq lost 37.59, or 0.46%, to 8,185.21, and the S&P 500 declined 19.62, or 0.65%, to 2,984.42.