The S&P 500 finished the week about 100 points below the high of 3027 hit on July 26 as the China tariff tweets sent Thursday afternoon by President Trump spurred another day of selling. Trade worries largely overshadowed a good but not great U.S. jobs report this morning. Given the job additions, and healthy growth in wages, the report may have been enough to suggest the Fed would be looking at one more rate cut, at most, though that type of conclusion is less clear given the new tariff overhang.
ECONOMIC EVENTS: In the U.S., nonfarm payrolls increased 164,000 in July, which was roughly in-line with Bloomberg's consensus forecast, and the unemployment rate held steady at 3.7%. Average hourly earnings were up 0.3% month-over-month and up 3.2% year-over-year, both of which were slightly better than expected. The trade deficit narrowed 0.3% to $55.2B in June. Factory orders bounced 0.6% in June, which was a little below the consensus forecast. The University of Michigan's consumer sentiment index edged up to 98.4 in the final reading for July, which was the same as the preliminary reading. In energy news, Baker Hughes reported that the U.S. rig count is down 4 rigs from last week to 942.
TOP NEWS: Shares of Exxon Mobil (XOM) fell about 1% after posting better than expected revenue and profit in the second quarter, stating that average crude prices were stronger than Q1 in its Upstream business. Chevron (CVX), meanwhile, was flat after reporting mixed results, with earnings that topped expectations and revenues that were below consensus.
Shares of Square (SQ) dropped 14.3% following the company's quarterly results and the announcement that it will sell Caviar to DoorDash. While Square reported "solid" Q2 results, its Q3 targets missed expectations due to heightened marketing in the seller ecosystem ahead of the holiday season, Jefferies analyst John Hecht noted.
Pinterest (PINS) jumped 18.5% after its Q2 "beat and raise" report, which gained the stock a new bull. Deutsche Bank analyst Lloyd Walmsley upgraded the social media stock to Buy from Hold and raised his price target for the shares to $40 from $26 following last night's Q2 results on more confidence that the company can scale its ad business, in the U.S. and internationally, faster than expected.
In M&A news, Campbell Soup (CPB) announced that it has signed a definitive agreement for the sale of Arnott's and certain of Campbell's International operations to KKR (KKR) for $2.2B in cash.
Meanwhile, IBM (IBM) shares fell 2% after the company updated expectations for the company post-Red Hat acquisition in an investor briefing, during which it cut its fiscal 2019 operating earnings per share guidance to at least $12.80 from at least $13.90, guided for mid single digit growth in 2020-2021 revenue, and said it sees Red Hat as accretive to the company's operating EPS by the end of Year 2 post-closing. IBM added that it sees third quarter base revenue down $1.3B-$1.4B from the second quarter.
MAJOR MOVERS: Among the noteworthy gainers was Lumber Liquidators (LL), which rose 6.1% after Whitney Tilson said in his Empire Financial Daily newsletter that the stock reminds him of SodaStream. Also higher were Aphria (APHA) and Fortinet (FTNT), which gained a respective 41% and 8.9% after reporting quarterly results.
Among the notable losers was NetApp (NTAP), which dropped 20.2% after it reported downbeat preliminary Q1 results and lowered its fiscal 2020 revenue outlook. Also lower were Glu Mobile (GLUU) and Chemours (CC), which fell 36.5% and 19.1%, respectively, after reporting quarterly results.
INDEXES: The Dow fell 98.41, or 0.37%, to 26,485.01, the Nasdaq lost 107.05, or 1.32%, to 8,004.07, and the S&P 500 declined 21.51, or 0.73%, to 2,932.05.
Exxon Mobil
-0.45 (-0.62%)
Chevron
-0.01 (-0.01%)
Block
-11.6 (-14.29%)
Campbell Soup
+0.23 (+0.55%)
KKR
-0.435 (-1.70%)
+5.095 (+17.99%)
IBM
-3.09 (-2.06%)
LL Flooring
+0.5 (+6.11%)
APHA
+
Fortinet
+6.89 (+8.71%)
NetApp
-11.66 (-20.20%)
Glu Mobile
-2.78 (-36.63%)
Chemours
-3.46 (-19.07%)